Wed, July 24, 2024

Australia’s Currency Surged After Election Win

Australia's Currency Surged After Election Win - Wibest Broker

On Monday, the Australian dollar boosted as investors buoy over an election win by Prime Minister Scott Morrison’s conservative coalition. Aussie is on its way to its highest increase this year, while mixed global stocks broadly weighed on risk appetite.

Australia’s currency last surged 0.9% to $0.6926. The Aussie rebounded from its four-month trough of $0.6865. Dealers said that the briefly quoted high $0.6990 was a miss-hit. And the exact transacted peak was $0.6938.

FX strategist at Commerzbank in Frankfurt, Esther Maria Reichelt stated, “Many expected the Labour party to win but an Australian rate cut is still very much on the cards in the morning months and that will weigh on the currency.”

The center-left party defeated Morrison’s center-right Liberal National Coalition. And investors view the result as a more business-friendly environment.

Dull economic data and an increasing jobless rate fired up expectations of an interest rate cut in the Australian central bank in July.

Meanwhile, On Monday, the dollar was shockingly firm. It extends its gains from last week while concerns about the heating trade war between the United States and China polished the safe-haven appeal of the greenback.

Aside from that, positioning data stated a delicate dollar strength. The weak dollar strength was due to investors discreetly cutting some of their long positions in the U.S. currency against both its developed and rising market rivals.

The dollar was firm at a two-week high over 98 against a basket of its rivals.

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Other Currency

In the meantime, the Chinese currency, yuan, steadied after last week’s drop. But the Chinese currency is not stable as Chinese companies accumulate billions of dollars for dividend payments on their U.S.-listed stocks.

And the pound recovered some losses after its highest weekly drop in six months last week. The said currency rose 0.2% at $1.2736 and 0.1% stronger against the euro at 87.62 pence.

On Sunday, Prime Minister Theresa will make a new bold offer to British lawmakers. She aims to get her thrice-defeated Brexit deal by parliament before she retires in her position.


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