GETTY Donald Trump has been embroiled in fresh controversy

FREE now SUBSCRIBE Invalid email Make the most of your money by signing up to our newsletter fornow We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

The US dollar dropped sharply against both the pound and euro, after a report claims the President asked Mr Comey to drop an investigation into Michael Flynn and his connections to Russia. Now Congress is officially investigating the claims giving markets further fears. Demand for safe havens such as gold have jumped amid growing fears Mr Trump could be pushed out of the White House. The FTSE 100 sank to around 7,463 on Thursday morning, just two days after hitting a new record high. It comes after America's biggest stock indices fell sharply overnight, with the Dow Jones, the S&P 500 and the Nasdaq all sinking by more than one per cent. Sterling was up against the dollar to 1.30, its highest level against the US currency since Sepetember. Abd the euro was up to 1.109 against the dollar.

Bloomberg The pound was up against the dollar to 1.3 on Thursday May 18

Kathleen Brook, research director at City Index Direct, said: "The big theme this morning is the growing Russia/ Classified information/ FBI scandal that is engulfing President Trump and seems to be growing, octopus like, as we progress through this week.



"This is beginning to look a lot like Nixon’s Watergate scandal, in the sense that the Trump administration is fighting new fires everyday.



"The big question now is will one fire put an end to his Presidency altogether?" Naeem Aslam, chief market analyst at Think Markets, added: "Today is a risk off trade for investors as Mr Trump is badly engulfed by political turmoil.



"This has pushed the demand for safe haven and we are seeing increasing interest for the yellow metal gold.



"What investors are worried about is that the impeachment could take place over in the US, as the odds are showing more than 50 percent for such an event after the New York Times released its article.



"If such scenario does become a reality, we could literally say goodbye to Trump's reflation trade.



"The US stock futures moved sharply lower last night and we have experienced a big spike in the gold price due to the impeachment anxieties."

The London Stock Exchange The FTSE 100 is flat after reaching a fresh record high on Tuesday

UK economy update Britain's economy remains strong, an update on the labour market has showed. The number of people in work increased and the jobless continued to fall in the three months to March. The unemployment rate is now at just 4.6 per cent, falling from 4.7 per cent, according to data from the Office for National Statistics (ONS). At the same time, average weekly earnings for employees increased by 2.4 per cent including bonuses, and by 2.1 per cent excluding bonuses, compared with a year earlier. Howard Archer, chief UK economist at IHS Markit, said: "The good news for consumers is that the jobs market is currently continuing to see healthy growth despite the economy’s slowdown; the bad news is that there is no sign of pay picking up so they are getting increasingly squeezed as inflation rises." The update helped lift the pound.