The Aussie dollar was off on a rollercoaster ride at the open on Monday as heightened political uncertainty from an unclear election result at home contributed to uncertainty. Meanwhile anxiety over Brexit diminished slightly which put sterling and the other major currencies on a steadier footing.
GBP/USD edged up to 1.3306, consolidating after an 11 percent plunge to a 31-year trough of 1.3122 a week ago in the wake of Britain's June 23 vote to leave the European Union.
The far less dramatic Australian election results, but still uncertain, gave forex investors in the region an easy excuse to sell the Aussie, which slid as far as 0.7410 in thin early trade, from 0.7495 late in New York on Friday.
AUD/USD has since rebounded to 0.7499. European stocks opened slightly higher on Monday amid a continuing recovery in global stocks after the Brexit vote. The pan-European STOXX 600 was up 0.3 percent.
European markets followed gains in Asia where markets traded higher on Monday, continuing a post-Brexit global recovery, with major indexes in Australia and Japan reversing early losses.
For the other major currencies, Brexit risks are beginning to fade as a driver with nerves calmed by promises of more stimulus from the Bank of England and talk of UK corporate tax cuts to offset the shock of leaving the EU.
The clear fallout from Brexit is that investors no longer expect the Federal Reserve to hike US interest rates this year, while other major central banks are seen poised to ease policy further.
US Treasury yields plunged on Friday with the benchmark 10-year briefly reaching a four-year trough of 1.382 percent, before closing at 1.461 percent.
EUR/USD traded around 1.1130, close to 1.1139 on Friday, and EUR/JPY was little changed at 114.31. USD/JPY was steady at 102.62.
