The Australian dollar moved higher in Asian trading, largely ignoring the announcement of a federal election on September 14.
The announcement stunned political pundits but elicited little reaction in currency markets.
At 5pm AEDT, the dollar was trading at $US1.0473, up US0.21c.
The lengthy election campaign could dampen consumer confidence, some analysts warned. It raised pressure on the Reserve Bank to cut interest rates over coming months, they said.
"Given the long period of this campaign, it is likely that rates will be adjusted," said Nomura strategist Martin Whetton.
"While this would generally be seen to favour the incumbent, if it is due to lower activity levels and higher unemployment, this advantage could be erased."
The early election call might give some certainty to business investment planning, benefiting the economy, ANZ Bank currency strategist Andrew Salter said. "Companies can plan for the future, which at this stage the markets and polls strongly suggest will include a change of government," Mr Salter said.
The next focus for the Australian dollar will be the Reserve Bank's policy meeting on Tuesday. Financial markets are pricing in a 20 per cent chance of an interest rate cut.
Meanwhile, economists are weighing the cost of floods in Queensland and NSW. In 2010 flooding shut down coal production in Queensland, stalling the economy.
"There may be a modest reduction in export output in the March quarter that will be recovered over the June and September quarters," CommSec chief economist Craig James said.
A meeting of the US Federal Open Markets Committee was not expected to contain any surprises, RBC Capital Markets strategist Michael Turner said.
