The Australian dollar jumped on Monday as markets responded to the surprise election victory of the country's conservative government in a national poll held over the weekend.
The Australian dollar jumped on Monday as markets responded to the surprise election victory of the country’s conservative government in a national poll held over the weekend.
The Aussie climbed around 0.5 percent to a one-week peak of $0.6990, before paring gains slightly to trade around $0.6898.
“The AUD bounced this morning following the weekend’s Federal election,” said Imre Speizer, strategist at Westpac bank, adding that the currency could rise to 0.6965 throughout the day.
Australia’s Liberal-led coalition has won or is leading in 74 seats in its quest for a 76-seat majority, according to the Australian Electoral Commission, with three-quarters of votes counted.
The government campaigned on a platform of tax cuts and stability, but polls in the lead up to the election had pointed to a win for the opposition Labor Party, which had promised to reduce inequality through tax reform, higher wages, better public infrastructure and faster action on climate change.
The prospect of an extension of the status quo provided certainty to investors.
“Fiscal policy will be almost unchanged from the most recent Pre-election Economic and Fiscal Outlook given the Coalition’s election commitments had a net (positive) A$102 million ($70.38 million)impact on the underlying cash balance,” said ANZ analysts in a research note.
Meanwhile, the Kiwi dollar pared its losses after falling to a seven-month low at the end of the previous week on a rocky global outlook for trade, rising 0.3 percent to $0.6529 on Monday morning.
The Aussie rose to A$1.0605 against its New Zealand neighbour, though later slipped to A$1.0564.