Late last week, former Australian Prime Minister Kevin Rudd sent the Twitter-sphere ablaze, as he announced his resignation as Foreign Minister. According to Rudd, he couldn’t serve at in his position if he didn’t have the full-backing and confidence of incumbent Prime Minister Julia Gillard and her minions.
Okay fine, he didn’t really say “minions,” but you get my point – Rudd and Gillard aren’t exactly chums.
In case you forgot, Gillard replaced Rudd as Prime Minister in mid-2010, when Rudd’s popularity went down under following the sloppy implementation of unpopular policy moves, which included a 40% tax rate for mining companies and a carbon emissions tax.
Since then, rumors are that Rudd has been trying to undermine Gillard and gain support from other members of the Labor Party. After being criticized by both Gillard and Deputy Prime Minister Wayne Swan for putting personal interests ahead of the party’s, Rudd finally said that enough was enough and that he was stepping down. In response, Gillard proposed to have a leadership vote to see who should lead the Labor Party!
That’s right folks – they’re putting it to a vote!
On Monday, members of the Labor Party will be voting to see who should be the man – err… woman – to lead the party.
While both Gillard and Rudd seem to be confident in their chances of winning, the truth is that regardless of who wins, the Labor Party is in a major hole.
Recent polls show that voters are siding with the Liberal-National coalition, which is led by Tony Abbott. If the name sounds familiar, it’s because he was the dude who ran against Gillard at the last election! All the squabbling within the Labor Party has left a bad taste on voter’s minds, with 55% of voters now supporting the opposition.
If these political issues continue to drag on, it could lead to some bearish moves for AUD/USD.
Currently, the pair seems to be forming a double top, with the 1.0600 to 1.0650 price area serving as the neckline. Coincidentally, the last time these two butted heads, the pair was also on the verge of a breakdown.
Should the loser of Monday’s election fail to step down quietly, we may just see AUD/USD break through the neckline and drop all the way back down to parity!