AUD/USD is up already more than 1% on Monday. Nonetheless, Australia's election result should be no game-changer for the aussie – which is set to trade above 0.71 on the back of risk-on sentiment, economists at ING report.

Not many implications from change in government

“The result of the election in Australia does not appear to be a straightforward positive or negative for the AUD, also considering it was in line with projections. The Labor Party leader, Anthony Albanese, was sworn in as Prime Minister and appears on track to secure a fully-fledged majority in the parliament.”

“Although it is possible that Labor will represent a slightly more fiscally supportive government than its predecessors, we don’t see many implications for financial markets from this election result.” 

“AUD remains strictly tied to China-related sentiment (which has improved lately) and global risk dynamics. For now, AUD/USD should be able to hold above 0.71, although some material downside risks persist.”