Greg Gibbs, Analyst at Amplifying Global FX Capital Pty Ltd, points out that the AUD has bounced on the choice of Scott Morrison as the new leader of the LNC and PM.
Key Quotes
“He is a positive surprise after it appeared that the initial challenger, Peter Dutton, might get the job.”
“The new leader, Scott Morrison, comes from the Treasury portfolio and has developed a reputation as a steady pragmatist in both his former ministries of immigration and social services. He appeals to the hard right in his party, having successfully executed a hardline policy on reducing desperate immigration via boats, but has not aligned himself with a broader anti-immigration viewpoint.”
“Importantly, he was loyal to the former PM Turnbill until he removed himself from the race and thus can stand above the pattern of party in-fighting that has turned off the public in recent years.”
“He is not entirely above populist policies that might undermine markets. But in most instances, he appears to have balanced what is achievable with what is practicable.”
“Morrison appears to offer the right balance for the conservative party and has the strength and intellectual capacity to unite the party. He may help lift the standard of government. As such, his ascendency should help support the AUD.”
“The ascendency of Morrison should continue to help the AUD stabilise with upside potential should he perform well in the role.”
“The market will, however, remain circumspect on AUD assets through the next election, looking on both major parties to prove they can rise above petty politics and set a stable policy course that supports business and consumer confidence.”
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