The Australian dollar, already under pressure from a resurgent greenback, has fallen to fresh three-month lows following news that Australian Deputy Prime Minister Barnaby Joyce has been ruled ineligible to stand for parliament by the High Court of Australia.
Joyce sits in the House of Representatives where the ruling Liberal-National Coalition government only has a majority of one. Joyce’s disqualification means the government has lost its majority in the Lower House.
The AUD/USD dipped to as low as .7626 on the news, and is currently trading at .7633.
“The government will likely need support from the lower house cross bench in between the ruling and the by-election that would result for Mr Joyce’s seat of New England,” said Tapas Strickland, economist at the NAB.
“That support would likely come in exchange for some concessions to conservative independents — either Katter or McGowan. An alternative is for the opposition to voluntarily pair Mr Joyce’s no longer valid vote.”
Australia’s ASX 200 has also fallen on the news, briefly slumping 1% before rebounding in recent trade.
It currently trades at 5,891.1 points, down 0.42% for the session.
Australian bond markets are largely unchanged following the decision.
While the market reaction has been muted today, that’s unlikely to be repeated once the New England by-election result is known.
It will take place on Saturday, December 2.