© Reuters. FILE PHOTO: Australian Dollar Photo Illustration
By Saikat Chatterjee
LONDON (Reuters) – The Australian dollar surged on Monday and is on the brink of its biggest rise this year, as investors welcomed the shocking election victory of conservative Prime Minister Scott Morrison's coalition. that mixed global equities have weighed heavily on risk appetite.
The last increase was 0.9% to $ 0.6926, after a low of $ 0.6865 in four months. It was briefly quoted at US $ 0.6990, but dealers said it was an error and that the actual trading peak was $ 0.6938.
"The surprise victory feeds the rally while many hoped the Labor Party won, but a reduction in Australian rates is still at stake in the charts for the next few months, which will weigh on the currency," said Esther Maria Reichelt, foreign currency strategist. Commerzbank (DE 🙂 in Frankfurt.
The center-left Labor party was tipped to win the federal election, defeating the Morrison Center-Right Liberal National Coalition, which investors see as more business-friendly.
Poor economic data, including a rise in the unemployment rate, have fueled expectations of the Australian central bank to cut interest rates as early as July.
Elsewhere, the dollar was surprisingly firm on Monday, extending last week's gains, as worries over the US-China trade war brewed the ticket's appeal. green.
Positioning data, however, has suggested that the strength of the dollar could be tenuous, as investors have quietly reduced some of their long positions on the US dollar against rivals in developed and emerging markets.
Faced with a basket of rivals, the dollar has stabilized at a two-week high above 98.
The pound recorded losses after recording its biggest weekly decline in six months last week, slightly up 0.2% at 1.2736 USD and 0.1% stronger against the euro at 87.62 pence.
Prime Minister Theresa May announced on Sunday that she would make a "bold new offer" to British lawmakers to try to get her Brexit deal passed three times by parliament before she leaves office.
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