By Sikat Chan Atrg
The Australian dollar rallied on Monday and is on course for its biggest rally this year as investors cheered in a shock election by Prime Minister Scott Morrison's conservative coalition, though mixed global stocks weighed risk appetite.
The index rose 0.9% to $ 0.6926 after jumping from a four-month low of $ 0.6865. This was briefly quoted as high as $ 0.6990 but dealers said it was a hit hit and the actual practice record was $ 0.6938.
"The triumph of surprise feeds the rally as many expected the Labor Party to win, but the Australian interest rate cuts are still very much on the cards in the coming months, and that will weigh the currency," says Esther Maria Reichlet, FX strategist at Commerzbank (DE) in Frankfurt.
The center-left Labor Party won the federal election, beating the Morrison Center's right-wing National Liberal Coalition, which investors see as more business friendly.
Lukewarm economic data, including an increase in unemployment, raised expectations that the Reserve Bank of Australia would cut rates as early as July.
Elsewhere, the dollar was surprisingly strong yesterday, adding to its gains last week as concerns about a US-China trade war burned the safe haven of the dollar.
The position data offered a glimpse of the strength of the dollar may be slight, but investors quietly cut some of their long positions in the US currency against its emerging and emerging market rivals.
Against the basket of rivals, the dollar stabilized at a two-week high above 98.
The pound regained some losses after posting the biggest weekly drop in six months last week, up 0.2% at $ 1.2736 and -0.1% against the euro at 87.62 pence.
Prime Minister Theresa Mae said on Sunday she would propose a "bold new proposal" to British lawmakers in an attempt to secure a breech deal that was defeated by the three-member parliament before leaving office.
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