... So that You may be kept informed

Aust dollar stronger as Obama wins election

05 Nov 2008 5:53 PM
Aust dollar stronger as Obama wins election

By Stephen Johnson and Jordan Chong

SYDNEY, Nov 5 AAP - The Australian dollar closed four per cent stronger today as Senator Barack Obama's victory in the US presidential election made financial markets upbeat.

At 1700 AEDT, the Australian dollar was trading at 69.17 US cents, up 2.64 US cents from yesterday's close of 66.53 cents.

The Australian dollar was on a firm footing today, following a four per cent surge on Wall Street overnight ahead of the US presidential vote.

Regional shares surged on reports Senator Obama was likely to beat John McCain in the US electoral college count that decides the presidency.

The Hong Kong market jumped 5.7 per cent in early trade, Japan's Nikkei stock index was up 2.5 per cent in the afternoon and the Australian share market closed three per cent firmer.

"There's a sense here in the markets that Obama's win is quite positive forthe economy," Easy Forex senior dealer Francisco Solar said.

"A Democrat is seen as a better steward to fix the financial crisis than another four years of Republican policy."

The Australian dollar fell to a low of 68.32 US cents in mid afternoon trade, sinking below 69 US cents as Senator McCain's concession speech sparked a flurry of US dollar buying.

"There was a sense this was a positive US dollar story," Mr Solar said.

"As soon as word come out the Aussie and the Kiwi fell significantly."

The Australian dollar climbed back above 69 US cents in the final minutes of local trade, but it had trouble retesting its late morning high a touch above 70 US cents.

The Australian dollar is tipped to face selling pressure tomorrow, with economists expecting 10,000 jobs to have been shed in October.

As the local session ended, the Australian dollar was worth 68.86 Japanese yen, up from yesterday's close of 65.74 yen, and at 53.76 euro cents, up from yesterday's close of 52.66 euro cents.

The euro finished at 1.2866 US dollars, up from yesterday's close of 1.2626US dollars and at 128.08 Japanese yen, up from 124.78 yen.

The US dollar closed the local session at 99.56 Japanese yen, up from 98.83yen.

Meanwhile, the Australian bond market closed weaker after a large sell-off at the start of local trade.

At 1630 AEDT, the yield on the Commonwealth Government March 2019 bond was at 5.342 per cent, up from yesterday's close of 5.263 per cent, while the yield on the June 2011 bond was at 4.333 per cent, up from 4.275 per cent.

On the Sydney Futures Exchange, the December 10-year bond futures contract price was at 94.655, down from yesterday's close of 94.730, while the December three-year contract price was at 95.640, down from 95.695.

The 90-day bank bill rate closed at 5.120 per cent, down from yesterday's close of 5.170 per cent, while the 180-day bank bill rate was at 4.690 per cent, down from 4.730 per cent.

At 1600 AEDT, the Reserve Bank of Australia's trade weighted index (TWI) was at 56.3, up from yesterday's close of 54.8.

AAP jtcsajlk=0A