The Australian dollar weakened after the country's election over the weekend ended up too close to call, raising the prospect of a hung parliament.
The dollar started about 0.4% lower around $0.7435 but later edged back up to $0.7469 in light trading.
The benchmark ASX/S&P 200 fell in early trading on Monday before rising 0.3% following a gain in commodities.
Neither the ruling Liberal-National Coalition nor the opposition Labor parties secured an outright majority.
The result won't be decided until at least Tuesday, which is when vote-counting resumes.
The uncertainty and an increased risk of Australia having it's "AAA" credit rating cut has "dented" the country's currency, Vishnu Varathan from Mizuho Bank said.
Australia's central bank is also expected to hold fire at its policy meeting on Tuesday, analysts Capital Economics said:
"The fallout on the economy and financial markets from the uncertain outcome of the Federal election will probably be relatively mild and short-lived and is unlikely to prompt the Reserve Bank of Australia to cut interest rates from 1.75% to 1.50%.
"It is concerns over the weak outlook for inflation, not the political outlook, that will trigger a rate cut to 1.50% in August," it said in a report.
Elsewhere in Asia
Asian markets are mostly rising as traders turn their focus from the UK's decision to exit the European Union to the prospect of policymakers unleashing more easing measures to boost growth.
Japan's Nikkei 225 has also reversed earlier losses and rose 0.7% in the afternoon session. South Korea stocks are 0.4% higher.
In Greater China, the Shanghai Composite gained 1.8% and Hong Kong's Hang Seng rose 1.5%.
One stock not doing well though is Chinese property developer Vanke, which is undergoing a contested restructuring.
Its shares were suspended from trading in Shenzhen after plunging by the daily 10% limit.
The dollar started about 0.4% lower around $0.7435 but later edged back up to $0.7469 in light trading.
The benchmark ASX/S&P 200 fell in early trading on Monday before rising 0.3% following a gain in commodities.
Neither the ruling Liberal-National Coalition nor the opposition Labor parties secured an outright majority.
The result won't be decided until at least Tuesday, which is when vote-counting resumes.
The uncertainty and an increased risk of Australia having it's "AAA" credit rating cut has "dented" the country's currency, Vishnu Varathan from Mizuho Bank said.
Australia's central bank is also expected to hold fire at its policy meeting on Tuesday, analysts Capital Economics said:
"The fallout on the economy and financial markets from the uncertain outcome of the Federal election will probably be relatively mild and short-lived and is unlikely to prompt the Reserve Bank of Australia to cut interest rates from 1.75% to 1.50%.
"It is concerns over the weak outlook for inflation, not the political outlook, that will trigger a rate cut to 1.50% in August," it said in a report.
Elsewhere in Asia
Asian markets are mostly rising as traders turn their focus from the UK's decision to exit the European Union to the prospect of policymakers unleashing more easing measures to boost growth.
Japan's Nikkei 225 has also reversed earlier losses and rose 0.7% in the afternoon session. South Korea stocks are 0.4% higher.
In Greater China, the Shanghai Composite gained 1.8% and Hong Kong's Hang Seng rose 1.5%.
One stock not doing well though is Chinese property developer Vanke, which is undergoing a contested restructuring.
Its shares were suspended from trading in Shenzhen after plunging by the daily 10% limit.
No comments:
Post a Comment