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FOREX-U.S. dollar, yen rise after Trump's positive COVID test

Fri, 2nd Oct 2020 15:15

* Dollar and safe-haven yen up amid sell-off of risky assets
* Commodities-exposed currencies under pressure
* U.S. jobs growth slows in September
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Adds new comment, U.S. data, FX table, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 2 (Reuters) - The safe-haven yen and dollar rose on Friday after President Donald Trump
tested positive for COVID-19, rattling investors just a month before November's U.S. presidential
election.
Data showing U.S. nonfarm payrolls rising less than expected in September, but with a drop in the
unemployment rate, had little impact on currencies as markets were more focused on Trump's health.
Trump, who had played down the threat of the coronavirus pandemic for months, said on Friday he and
his wife Melania had tested positive for COVID-19 and were going into quarantine, upending the race for
the White House.
The news sparked a sell-off in European stocks, before they pared some of their losses, and on Wall
Street.
The yen made its sharpest gain in more than a month to reach a one-week high of 104.95 and was last up
0.3% on the day at 105.27 yen to the dollar.
Implied volatility gauges for the yen rose to a four-week high of 7.6 vols over the next
month, signaling more choppy trading ahead.
"Trump's positive COVID test is negative for risk sentiment because there is tremendous uncertainty,"
said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York, adding
that the 74-year-old president's health could worsen because of his age, or he could get sympathy votes.
"But until we get clarity, the safe havens will continue to surge," he added.
Currencies seen as riskier bets fell across the board, with a fall in oil prices also pressuring the
commodities-exposed Russian rouble, South African rand and Australian dollar.
Data showing slowing U.S. employment had marginal FX impact, but it underscored the challenges the
economy faced as it tries to emerge out of the recession.
In the last monthly employment report before the Nov. 3 presidential election, the Labor Department on
Friday said nonfarm payrolls increased by 661,000 jobs last month after advancing 1.489 million in August.
Economists polled by Reuters had forecast 850,000 jobs were created in September.
"The participation rate fell to 61.4%, suggesting that workers are giving up on the job search and are
leaving the labor force," said Karl Schamotta, chief market strategist, at Cambridge Global Payments in
Toronto.
"Overall payrolls remain roughly 10.7 million jobs short of levels that prevailed in February - and
the rate of improvement could continue to slow in the months to come as a fall in government stimulus
spending cuts income and consumption levels."
In midmorning trading, the dollar rose 0.1% against a basket of six major currencies to 93.815,
but remains down 0.8% for the week - its biggest weekly drop since late August.
The euro fell 0.3% to $1.1716.

========================================================
Currency bid prices at 10:01AM (1401 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1714 $1.1747 -0.28% +4.49% +1.1750 +1.1697
Dollar/Yen JPY= 105.2900 105.5000 -0.20% -3.28% +105.6600 +104.9500
Euro/Yen EURJPY= 123.32 123.95 -0.51% +1.12% +124.0000 +123.0300
Dollar/Swiss CHF= 0.9205 0.9183 +0.24% -4.89% +0.9218 +0.9182
Sterling/Dollar GBP= 1.2929 1.2889 +0.31% -2.49% +1.2953 +1.2839
Dollar/Canadian CAD= 1.3314 1.3287 +0.20% +2.53% +1.3330 +1.3277
Australian/Doll AUD= 0.7164 0.7183 -0.26% +2.04% +0.7189 +0.7132
ar
Euro/Swiss EURCHF= 1.0781 1.0788 -0.06% -0.65% +1.0796 +1.0769
Euro/Sterling EURGBP= 0.9056 0.9111 -0.60% +7.12% +0.9123 +0.9045
NZ NZD= 0.6632 0.6645 -0.20% -1.54% +0.6654 +0.6615
Dollar/Dollar
Dollar/Norway NOK= 9.3014 9.3057 -0.05% +5.96% +9.4077 +9.2927
Euro/Norway EURNOK= 10.8970 10.9278 -0.28% +10.77% +11.0259 +10.8940
Dollar/Sweden SEK= 8.9182 8.9129 -0.23% -4.59% +8.9637 +8.8870
Euro/Sweden EURSEK= 10.4510 10.4752 -0.23% -0.17% +10.5090 +10.4240

(Reporting by Gertrude Chavez-Dreyfuss; additional reporting by Iain Withers; editing by Jonathan Oatis)

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