The U.K. political situation continues to be murky, especially now that Nick Glegg, the Liberal Democrat candidate, is pulling into a position of prominence. Additionally, the Labor Party and the Tory Party are only a few points apart in polling.

All of this political uncertainty is contributing to a lower sterling in forex trading. GFT's Boris Schlossberg reports in FX360 on the current situation for the sterling:

Cable was lower by nearly a cent in early London dealing on heightened concerns over this lack of clarity in UK politics. The unit has been stuck in a  tug of war between the bulls who point to improving UK economic fundamentals and the bears who highlight the extent of the country’s fiscal deficit problems and the lack of political will to resolve them.

The FTSE 100 is lower today as well, and U.S. stocks are struggling. This does not help matters, since sterling often derives support in forex trading from rising equities.

Spread betting and contracts for differences on the spot forex market should consider that the U.S. dollar is higher this morning. Greenback has the advantage today as risk appetite fades.

Yesterday's global economic rally spurred risk appetite, and that sent the U.S. dollar lower on the spot forex market. However, today the story is a little different. Initial jobless claims are up, creating concerns about the sustainability of the economic recovery.

The news has U.S. stock futures pointing to a lower open today. European markets are barely managing to hold on to gains, and the FTSE 100 is just barely above the break-even point.

If U.S. stocks can't overcome the negative sentiment today, it is likely that we will see the U.S. dollar make more gains as investors and forex traders look for safe haven investments.

Risk appetite is increasing on the spot forex market today as good news come in. Global equities are gaining ground today, spurring investors to look for higher gains.

In spot forex trading, the euro is gaining against the U.S. dollar, as is the sterling. The greenback is not receiving fundamental support from the fact that retail sales came in much better than expected for the month of March.

Indeed, forex traders are instead looking for the returns of higher yielding currencies. Considering the fundamentals is not what is happening right now; it's all about the risk trade.