EUR/GBP has risen over 3% this week as GBP failed to make any ground against the week USD, with concerns building surrounding the British political uncertainty. Ahead of the UK General Election, all leader debates are now over and polls suggest that the voting public are no closer to deciding a winner, with most polls suggesting just a couple of percentage points difference in popularity, with neither Labour or Conservatives predicted to get a majority. Concerns are further heightened by party leaders Cameron and Miliband both skirting the issue of forming a coalition, particularly with regards to the SNP, who pollsters this week suggested could win every single Scottish seat. With this in mind, political uncertainty could not only continue to ramp up until the election day itself on Thursday, but perhaps beyond results as negotiations are made between parties to assess if a coalition could be made, who it would consist of, or conversely if the UK may be run by a less influential minority government.
Looking ahead to next week, as well as the aforementioned UK General Election and Greek payments, participants will also be looking out for the RBA rate decision, with 24 out of 28 surveyed analysts forecasting a cut by 25bps; however AUD/USD broke above its 100DMA this week to trade at its highest level since January. Elsewhere, Friday will see the US Nonfarm Payrolls report which will be in particular focus this month after the previous reading printed a dramatically lower than expected number, and after the aforementioned weak GDP reading this week.
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EUR/USD is holding higher ground above 1.1100 in the early European session on Thursday. The pair is underpinned by the renewed US Dollar retreat, as traders digest the Fed's dovish outlook, bracing for ECB-speak for fresh trading incentives. US data are also eyed.
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