Key swing states voting Republican has seen the dollar climb in the United States.
Donald Trump declared victory just after 7am UK time calling it a "magnificent victory for the American people".
The dollar surged by 1.3 per cent against the pound, which is worth $1.287, the lowest level since mid-August.
It is also looking like control of the Senate will go to the Republicans who could also win the House, though this is not yet confirmed.
Lindsay James, investment strategist at Quilter Investors, warned the Trump presidency will lead to volatility.
She added: “While he, and others that surround him such as Elon Musk, want to cut the size of the state, public spending is likely to remain very high and taxes kept low.
"Many of his measures will be inflationary and likely to lead to a rise in bond yields, putting pressure on the Federal Reserve in its quest to bring interest rates down.
"Investors have already responded to the news that Trump will regain power. Bond yields are up and the dollar has risen too as a result.
"Widespread tariffs will now likely be implemented, choking global trade in the meantime, while the deficit is likely to grow ever larger, at a time when markets are getting a little nervous about the sheer scale of spending.
"While the economy was perhaps the defining feature of this election for voters, an emboldened Trump presidency is likely to add fuel to the fire."
While Susannah Streeter, head of money and markets at Hargreaves Lansdown said there are risks inflationary pressures in the US, prompted by higher tariffs, could extend outside the country.
She said: "As the dollar rises, countries which import commodities priced in USD may also see prices increases, which will either need to be absorbed by companies or passed onto customers. If other countries started to feel onerous effects of higher tariffs on their economies, there may be more demand for the dollar as it is considered to be a safe haven.
"This could be counter-productive to efforts to increase exports from the US as the stronger dollar is likely to make products of US exporters less competitive globally.
"When it comes to Europe, an increase in tariffs imposed on exports is likely to cause some pain, but given the dollar is also strengthening and is likely to be beefed up even further, due to inflationary pressures, the currency changes may help British and European firms maintain their competitiveness."
tara.o'connor@ft.com
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