European stock markets have surged and the US dollar continues to strengthen as traders react to Donald Trump nearing victory in the US presidential election.

The UK’s FTSE 100 jumped by about 1.5% when markets opened on Wednesday as an anticipated Republican win provides some certainty for the future of the world’s biggest economy.

The pound was down about 1% against the US dollar, at 1.292, with the American currency making sharp gains overnight.

It comes after markets in New York got a lift during Wednesday’s trading despite uncertainty heading into the final day of voting.

Economists said investor sentiment in the US is being bolstered by the prospect of a lower tax environment under a Trump presidency, while the implementation of trade tariffs could serve to strengthen the US dollar.

However, the global impact of potential economic measures are still being assessed, experts said.

A group of economists for ING Economics said: “While opinion polls had suggested a close-run race, financial markets appeared increasingly confident of such an outcome, with equity markets, the dollar and Treasury yields all rising in recent weeks.

“Whether these trends remain in place depends on how quickly Trump can marshal his party and pass his legislative agenda through Congress.”