Dollar treads water amid uncertainty

The local unit failed to be pushed lower in early afternoon by Australia’s political confusion.

The Australian dollar has edged up marginally despite political uncertainty as the federal election remains on a knife edge.

At 1.10pm (AEST) on Monday, the currency was trading at US74.94 cents, down from US74.98c on Friday.

“The general election failed to deliver a clear winner, and the likelihood of another minority government weighs on investor sentiment,” OANDA Australia and Asia Pacific senior trader Stephen Innes said.

It came as Fitch Ratings said the uncertain election result was not a direct threat to Australia’s credit rating, but risks could arise if the sworn-in party showed a lack of interest in returning the budget to surplus over the medium-term.

The ASX 200 index, however, had bounced back from early jitters to sit slightly higher at midday.

AAP