SINGAPORE (Reuters) – The dollar jumped and the safe-haven yen hit its highest level of the week on Friday after U.S. President Donald Trump said he tested positive for COVID-19 and entered quarantine.

George Washington is seen with printed medical mask on the one Dollar banknotes in this illustration taken, March 31, 2020. REUTERS/Dado Ruvic/Illustration

The news could cause a new wave of market volatility as investors brace for the hotly-contested presidential election in November.

The greenback rose about half a percent on the risk-sensitive Australian and New Zealand dollars, while the yen was up roughly 0.3% at 105.27 per dollar, its highest since Monday.

The euro fell 0.3% to $1.1716.

The yen made even larger gains against other currencies, amid a broad shift out of riskier assets and commodities. Volumes in Asia were lightened by holidays in China.

Trump said on Twitter that he and his wife Melania tested positive for the coronavirus and would quarantine.

Analysts said this could upend the campaign, but that the medium-term implications for currencies were not immediately clear.

“It has the potential to reduce Trump’s campaigning ability,” said Sean Callow at Westpac.

“It’s also hurts him as far as the whole narrative that it’s really not much to worry about – it puts the COVID crisis itself back front and centre…But does it shift polls? I just don’t know.”

The Australian dollar was last at $0.7144 and the kiwi at $0.6629. Against a basket of six major currencies the dollar rose 0.2% to 93.899.

Investors had already been on edge on signs that a hoped-for U.S. fiscal stimulus package was stalled in Washington, and after a spate of data, including jobless claims and consumer spending, suggested that the plodding U.S. economic recovery could be losing steam.

“What this does say is that the risk of the virus picking up is still quite real,” said Bank of Singapore FX analyst Moh Siong Sim. “The U.S. infection rate is not going down anymore. This reminds people that the virus is still around.”

Reporting by Tom Westbrook; Editing by Stephen Coates, Simon Cameron-Moore and Kim Coghill

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