Australian Dollar Falls on Hung Parliament
Australia's Prime Minister Julia Gillard
Carla Gottgens/Bloomberg
Australian Prime Minister Julia Gillard addresses party supporters in Melbourne.
Australian Prime Minister Julia Gillard addresses party supporters in Melbourne. Photographer: Carla Gottgens/Bloomberg
Aug. 23 (Bloomberg) -- Kit Juckes, head of foreign-exchange research at Societe Generale SA, talks about global bond markets and the outlook for the Australian dollar following the weekend's electoral deadlock. He speaks with Mark Barton on Bloomberg Television's "Start Up." (Source: Bloomberg)
Aug. 23 (Bloomberg) -- Bloomberg's Haslinda Amin reports from Sydney on Australia's federal election. Neither Australian Prime Minister Julia Gillard nor opposition leader Tony Abbott gained an outright majority in the Aug. 21 election, meaning one side must win negotiations with independent lawmakers to form a government. (Source: Bloomberg)
Aug. 23 (Bloomberg) -- Robert Mead, head of portfolio management at Pacific Investment Management Co.'s Australian unit, talks about Australia's national election, and its implications for the nation's economy and financial markets. The Aug. 21 poll failed to deliver a parliamentary majority to either of the main parties for the first time in 70 years, meaning Prime Minister Julia Gillard or opposition leader Tony Abbott need the backing of independent lawmakers to form a government. Mead talks with Linzie Janis on Bloomberg Television's "Global Connection." (Source: Bloomberg)
Aug 23 (Bloomberg) -- George Boubouras, head of investment strategy at UBS AG's Australian unit, discusses the country's election, which left neither of the two main parties with an absolute majority. He talks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
Aug. 23 (Bloomberg) -- Atlas Iron Ltd. Chief Executive Officer David Flanagan talks about this past weekend's Australian election and its implications for a proposed tax on mining companies. Tony Abbott’s Liberal-National coalition led Prime Minister Julia Gillard’s Labor Party 72 seats to 70, four short of an absolute majority, according to figures on the Australian Electoral Commission website as of 8:45 a.m. today. Two independent lawmakers who may hold the balance of power say they disapprove of Gillard’s mining tax, which she has refused to scrap. Flanagan speaks from Perth with Bloomberg's Susan Li. (Source: Bloomberg)
Australian Opposition Leader Tony Abbott
Sergio Dionisio/Bloomberg
Australian Liberal Party Leader Tony Abbott speaks at a Liberal Party Election Function in Sydney.
Australian Liberal Party Leader Tony Abbott speaks at a Liberal Party Election Function in Sydney. Photographer: Sergio Dionisio/Bloomberg
Australia’s dollar touched the lowest level in a month against its U.S. counterpart after the nation’s federal election failed to deliver a majority government for the first time in 70 years.
The currency, known as the Aussie, weakened as neither Australian Prime Minister Julia Gillard nor opposition leader Tony Abbott gained an outright majority in the Aug. 21 vote, meaning negotiations with independent lawmakers are needed to form a government. The Aussie advanced briefly as global stocks rose on investor optimism amid more than $1 trillion in takeovers this year. It gave up gains as U.S. equities later fluctuated amid speculation the economy is faltering.
“The Australian dollar is going to stay heavy,” said Phil Burke, chief dealer for global foreign exchange and rates at JPMorgan Chase & Co. in Sydney. “Markets don’t like uncertainty.”
Australia’s currency traded at 89.35 U.S. cents at 12:35 p.m. in New York, compared with 89.39 cents on Aug. 20. It earlier touched 88.33 U.S. cents, the lowest level since July 22. The currency has declined 1.2 percent this month as opinion polls foreshadowed an increased chance of a minority government. The Aussie fell 0.5 percent to 76.14 yen.
The New Zealand dollar rose 0.2 percent to 70.79 U.S. cents, from 70.67 cents on Aug. 20, and fell 0.4 percent to 60.32 yen, from 60.55.
The Stoxx Europe 600 Index was up 0.6 percent, after gaining as much as 1.3 percent. The Standard & Poor’s 500 Index was little changed after rising 0.9 percent and falling 0.2 percent.
A daily close in the Aussie dollar below 88.50 cents “could be a little ugly,” with the next level of support near 87.70 cents, Burke said. Support is an area on a chart where orders may be clustered.
To contact the reporters for this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
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