News that President Trump has been infected with Covid has created a demand for safe haven currencies and in early trading Sterling is down against the greenback. This follows a roller coaster day for the Pound on Thursday when the market swung on contradicting assessments of a prospect of a trade deal between the UK and the EU. It fell and rose in direct response to Brexit related news. A Reuters report that this week’s trade negotiations had failed to bridge differences between the UK and EU, added to the news that the EU was launching a legal case over the internal market bill, resulted in Sterling falling nearly a cent. Later in the morning the Pounds fortunes reversed after the FT reported that they had been told by a source close to the negotiations that both parties were close to an agreement on state aid and fishing rights remained the last sticking point. After the day’s volatility, the pound closed the day down 0.4% and in early trading remains around the same levels.

After falling against the Dollar in far east trading, when news of President Trump’s infection broke, the EUR has managed to regain some of those losses since Europe opened. Market attention will now focus on the release of the Eurozone consumer price index at 1.10.00am. If the data comes in weak, traders may begin to price in the European Central Bank adopting a more relaxed approach to controlling inflation. Earlier this week ECB president Christine Lagarde dropped hints that this might be the case.

Safe haven currencies found support when President Trump tweeted that he and his wife had tested positive for Covid. With the US elections a month away, the uncertainty this caused resulted in a fall in equities and a demand for the Dollar in Far East markets. However, since European markets have opened, there has been little movement in the USD against its major currency pairings. US political leaders have continued to discuss a possible stimulus package without reaching an agreement. According to latest reports House leader Nancy Pelosi said talks were constructive, but they were still far apart on state and local aid. Later in the day, as always on the first Friday on the month, the US will publish a raft of economic data including the all-important unemployment figures for September.