The FTSE 100 has declined as traders increased their wagers on Donald Trump winning the US presidential race following the recent assassination attempt over the weekend.

Britain’s leading stock index dropped by as much as 0.7%, while the midcap FTSE 250 fell by 0.4%, reflecting global market jitters amidst political uncertainty in the US.

The dollar strengthened by up to 0.2% against the pound, reaching $1.297, as markets adjusted their expectations towards a potential Trump presidency after the incident in Pennsylvania.

The US currency has seen gains against all major G10 currencies in what are known as “Trump trades”.

US Treasury bond yields, which reflect US government borrowing costs, also rose post the assassination attempt.

PredictIT, an online betting site, has increased the odds of a Republican win to 66 cents from 60 cents on Friday, with Democrats at 38 cents. These odds imply that Republicans are considered twice as likely to win the election as Democrats.

Market expectations suggest that a Trump presidency could lead to more relaxed fiscal policies and higher tariffs on foreign goods.

Charu Chanana, market strategist at Saxo Capital Markets, commented: “With markets factoring in a higher chance of Trump 2.0, the US dollar is likely to gain support, while the Mexican peso and Chinese yuan may face pressure.”

“Trump-related trading strategies could regain prominence.”

Jack Ablin, chief investment officer at Cresset Capital, noted that the incident had bolstered the former president’s image for strength.