Markets are in full swing after the Easter Holidays as political events continue to weigh. Yesterday, the GBP jumped broadly to the highest level since early October as British PM Theresa May called for a snap election this June. With the first round of French elections also coming soon, political risks are looming over the EUR and GBP.
- Major events of the day: it’s going to be a relatively quiet day ahead, in terms of data releases, with the final reading of euro-zone March HICP inflation due, in addition to the European Central Bank (ECB) member speeches.
- GBPUSD had a low of 1.2511 for the day, with a high of 1.2915, making this one of the best days for the Cable in the last years. With Theresa May expected to get more backing from the House of Lords, traders have started speculating that if Brexit happens, it would probably be a better deal than previously expected.
- The EUR continues to hang in the balance ahead of the first round of the French election this Sunday. EUR remains somewhat depressed by the risk of an anti-EU candidate. If Macron gets through to the final round, we could start to see his probability of winning rise and the EUR strengthen.
- The USD has retraced much of its gains since the Trump election on the 8th of November. Some of this fall reflects lost confidence that Trump can deliver on his election rhetoric to cut taxes & boost infrastructure spending.
GOLD and JPY, as safe havens, continue to benefit from falling global sentiment and increased geopolitical tensions in the Korean Peninsula.
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