Currency markets react to President Trump

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Yesterday looked something more akin to a soap opera rather than a normal day in the 'office' for many investors across Europe. Brexit headlines dominated proceedings for the pound. Early in the day, the EU had launched legal proceedings against the UK over its Internal Market Bill alongside reports that negotiations had broken down pushed GBPUSD down over 1.5%. Then shortly before lunch, reports that a 'landing zone' on state aid had been identified shot the pound back up. The drama didn't end there. Near the end of the day, an EU official denied the landing zone report and the pound soured once again. This sort of volatility may become the new norm over the coming weeks and until the end of the month.The overnight session saw the Australian dollar initially break through the 0.7200 handle to touch intraday highs of 0.7209, before retreating to levels around 0.7175 during trade. The New Zealand dollar was the best performer on the day as it rose from 0.6620 to 0.6657, which saw the AUD/NZD cross fall about 50 points to 1.0800.With US economic data mixed and only modest gains in global equities, the AUD and NZD strength overnight is being attributed to a stronger Chinese yuan. With the Chinese economy faring much better than the US and Europe in response to COVID-19, the CNY had its best quarter in 12 years in Q3 and continued its ascent by rising 0.4% against the greenback overnight.