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Spanish election Ruling PP wins election, far from majority

FXStreet (Bali) - Ruling conservative party 'Partido Popular' won the Spanish elections, however, the seats obtained (122) fell well short of an absolute majority (176 needed), which will make forming a government a difficult task.

Socialists ended the election day with only 91 seats, while Podemos took 69 seats, followed by Ciudadanos with 40 seats. The big question is how can PP's Rajoy possibly form a govern? While there has been some talk that the ruling party may be backed up by Ciudadanos, that alliance alone would still not be enough.

Even if another minor party were to unite forces with PP and Ciudadanos, reaching an absolute majority will be hard. Never before a party had won the elections with such a little percentage of the total voting and left so much uncertainty.

Fernando Garea, from El Pais, notes: "The new Parliament will be a puzzle with more pieces that had the previous one, making it difficult to put together given the incompatibilities in views. The shadow of ungovernability will mark the post-election, as PP needs an agreement with at least two other parties to reach the absolute majority of 176 seats."

AUD/USD: thin trading but 0.7070 is key downside support

AUD/USD has been making a recovery into the year end from the lows below the 0.70 handle, a key position that was highlighted in last week's "What will 2016 bring to the Forex traders?" ran by FXStreet with a panel of experts, including Boris Schlossberg who explained AUD/USD is bid above 0.7000 while Adam Button, MD at Forexlive, was bearish in respect to the dubious jobs data and commodity markets.
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