Swirling uncertainty over US President Donald Trump’s political future saw world stocks extend their steepest fall in over six months yesterday, though there were signs of stabilisation elsewhere as the dollar and gold steadied.

Reports that Mr Trump had tried to intervene in an investigation into alleged Russian interference in last year’s US election and that his aides had numerous undisclosed contacts with Russian officials kept market tensions high.

Europe’s bourses dropped bet-ween 0.8 and 1.3 per cent as the selling pressure built again and Wall Street was expected to open down as much as 0.5 per cent, having suffered its biggest thumping in over eight months on Wednesday.

Though stocks flashed warning lights again, the dollar seemed to be going for the ‘calm down’ option. It pulled out of a tailspin that had taken it to its lowest level in six months against other top currencies including the euro and the yen, though it remained wobbly.

A mini-recovery in Asia as Japan posted its best economic performance in a year ran out of steam in Europe, and it was limping sideways at $1.1136 per euro and buying 110.97 Japanese yen by the time US traders got to their desks.

Switzerland’s safe-haven franc hit its highest since November’s US election and Britain’s Brexit-bruised pound broke through the $1.30 barrier for the first time since late September after reassuring retail sales figures.

There was more support for the euro too as one of the European Central Bank’s most influential policymakers, Executive Board member Benoit Coeure, said it should get on with paring back its stimulus once it is convinced inflation has recovered.

“Too much gradualism in monetary policy bears the risk of larger market adjustments when the decision is eventually taken,” Mr Coeure told Reuters.

Treasury yields seemed to be heading for a six-month low as they dropped back below 2.2 per cent and Germany’s and Europe’s benchmark government bond, the Bund, saw its yields dip to a fresh a two-week trough.

Among commodities there were steadier signals.

Brent oil futures slide back 60 cents to $51.60 a barrel after hitting a two-week high overnight on the back of an ongoing effort by Opec to cut production.

Safe-haven gold, meanwhile, hovered near a two-week high prompted by the weaker dollar and the risk aversion gripping the broader markets.

Spot gold was at $1,260 an ounce having hit $1,263.02, its highest since May 1.

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