Yen jumps after Trump catches COVID-19, shakes financial markets By Reuters

By Tom Westbrook

SINGAPORE (Reuters) – The dollar and yen rose on Friday after US President Donald Trump’s positive test for COVID-19 scared investors, just a month before the November presidential election.

Trump said on Twitter that he and his wife Melania had COVID-19 and that they would begin the quarantine and recovery immediately.

The yen it made its biggest gain in over a month to hit a one-week high of 104.95 per dollar after the Tweet and the dollar was up 0.7% against the risk-sensitive Aussie.

Both then pulled out when traders wondered how it might affect the election, underscoring the market uncertainty surrounding the implications for the November vote.

“The president of the United States has a disease that kills people. People are lowering their risk because of that,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.

“But we’re not sure how much this changes the election. The chance of Donald Trump surviving this is incredibly high,” he said, adding that the selloff could be reversed soon.

The losses in the euro () were more modest and for the last time it fell 0.2% to $ 1,172. The yen fell to 105.16 per dollar.

Sterling moved forward after Downing Street announced that British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen would meet on Saturday to discuss next steps in bitter Brexit negotiations. .

the it recovered about half of its losses at the end of the Asian session and was down 0.2% for the last time at $ 0.7165. The New Zealand dollar it was down 0.1% to $ 0.6645.

Both lost half a percent against the yen () () but rose from session lows. US equity futures also reduced some losses, although commodities remained under pressure.

Analysts said the next moves would hinge on Trump’s health, how far the virus has spread among top US officials and politicians, and the response of voters.

“As far as we know, Trump is not seriously ill. It is possible that by the time we get to operations in New York the markets will have calmed down,” said Yako Sero, a strategist at Sumitomo Mitsui (NYSE 🙂 Trust Bank in Tokyo.

“However, this damages Trump’s ability to campaign and time is running out before the election.”

Against a basket of currencies, the dollar registered 0.1% but continues to decline 0.8% during the week, its softest weekly performance since late August, as hopes for US stimulus have put investors in the mood for riskier bets.

NERVES

Still, even before Trump’s diagnosis, investors had begun to worry that the long-awaited US fiscal stimulus package had stalled in Washington, and were nervously awaiting US employment data at 1230 GMT.

With House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin disagreeing on what Pelosi described as differences in dollars and values, questions now arise as to whether a deal can be reached before the election. .

The recovery is also slowing, and economists expect data at 1230 GMT to show hiring in the United States increased by 850,000 jobs in September, a smaller gain than in August.

There are also growing concerns that coronavirus infection rates are increasing in Europe and the United States.

Madrid will become the first European capital to return to the blockade in the coming days to fight a sharp increase in cases.

A record surge in new cases in Wisconsin on Thursday stoked fears that hospitals would be overwhelmed.

“With the president confirmed as positive, this is a reminder to the market that the virus situation remains a problem,” said Bank of Singapore currency analyst Moh Siong Sim.

“Other than that, I’m not sure what it means for the market.”