SINGAPORE--The dollar and yen rose on Friday after U.S. President Donald Trump’s positive test for COVID-19 spooked investors, just a month out from November’s presidential election.

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

The yen made its sharpest gain in more than a month to reach a one-week high of 104.95 per dollar after the Tweet and the greenback rose as much as 0.7 percent on the risk-sensitive Australian dollar.

Both then pulled back as traders puzzled over how it might affect the election, underscoring market uncertainty around the implications for the November vote.

“The president of the United States has got a disease which kills people. People are de-risking 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 prospect of Donald Trump surviving this is incredibly high,” he said, adding that the selloff could soon reverse.

Losses in the euro were more modest and it was last down 0.2 percent at $1.172. The yen pulled back to 105.16 per dollar.

Sterling advanced after Downing Street announced British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen would meet on Saturday to discuss next steps in acrimonious Brexit talks. It was last 0.2 percent higher at $1.2913.

The Aussie recovered about half its losses by the end of the Asia session and was last down 0.2 percent at $0.7165. The New Zealand dollar was down 0.1 percent at $0.6645.

Both lost half a percent against the yen but lifted from session lows. U.S. stock futures also pared some losses, though commodities remained under pressure.

Analysts said the next moves would depend on Trump’s health, how far the virus has spread amongst top U.S. officials and politicians and on voters’ response.

“As far as we know Trump is not gravely ill. It is possible that by the time we reach New York trading that markets will have calmed down,” said Yako Sero, strategist at Sumitomo Mitsui Trust Bank in Tokyo.

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

Against a basket of currencies the dollar tacked on 0.1 percent, but remains down 0.8 percent for the week - its softest weekly performance since late August - as hopes for U.S. stimulus have had investors in the mood for riskier bets.

JITTERS

Still, even before Trump’s diagnosis, investors had begun to fret that the hoped-for U.S. fiscal stimulus package had stalled in Washington and were nervously awaiting U.S. jobs data due at 1230 GMT.

With House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin at odds over what Pelosi described as differences over dollars and values, doubts are now creeping in over whether a deal can be done before the election.

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

Concerns are also growing that coronavirus infection rates are climbing in Europe and the United States.

Madrid will become the first European capital to go back into lockdown in coming days to fight a steep surge in cases.

A record increase in new cases in Wisconsin on Thursday fanned fears of hospitals there being overwhelmed.

“With the President confirmed being positive, this is a reminder to the market that the virus situation is still a problem, “said Bank of Singapore FX analyst Moh Siong Sim.

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