* Aussie up 0.7% after PM's party secures shock election win
* Yen eases on slight recovery in risk appetite
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, May 20 (Reuters) - The Australian dollar rallied
against the greenback on Monday after a surprise election
victory by the country's conservative government, while the yen
eased as risk appetite improved slightly.
The dollar index against a basket of currencies was a shade
higher at 98.024 .DXY , having booked its biggest weekly rise
since early March last week.
The Aussie was last up 0.7% at $0.6916 AUD=D4 , having
bounced from a four-month trough of $0.6865. It was briefly
quoted as high as $0.6990 but dealers said that was a miss-hit
and the actual transacted peak was $0.6938. The currency's jump came after Australian Prime Minister
Scott Morrison's centre-right Liberal National Coalition scored
a shock win in federal elections, beating the centre-left Labor
party, who had been tipped to win. The election result helped provide stability to the
country's economic outlook, analysts said, as some had feared a
win for the less business-friendly centre-left Labor party could
have undermined growth.
"There's a sense of security with the continuation of the
current government," said Yukio Ishizuki, senior currency
strategist at Daiwa Securities.
"The risk that the economy will experience a big drop has
decreased considerably as a result."
The Aussie also found support on a statement from China's
central bank on Sunday that it would maintain the stability of
its yuan within a reasonable and balanced range. The yuan has taken a hit recently in the wake of
intensifying trade tensions between the United States and China.
Another factor in play was a surge in crude prices after the
Organization of the Petroleum Exporting Countries indicated it
will likely maintain production cuts, helping spur demand for
currencies sensitive to oil prices. O/R
The Canadian dollar advanced about a quarter of a percent to
C$1.3430 CAD=D4 .
Against the yen, the dollar added 0.1% to 110.215 JPY= ,
building on last week's gains, when it booked its first weekly
advance against the Japanese currency in five weeks.
The yen dipped on a slight improvement in risk appetite,
with data showing the Japanese economy unexpectedly accelerated
in the last quarter, defying expectations for a mild
contraction.
The world's third-biggest economy grew at an annualised rate
of 2.1%, government data showed, accelerating slightly from the
previous quarter thanks to net export gains. The euro was steady at $1.1155 EUR= , having dropped last
week on comments from Italian Deputy Prime Minister Matteo
Salvini that European Union rules harm his country. Investors' focus this week is on the May 23-26 elections for
the new European Parliament.
Market participants will also watch out European readings
for a private purchasing managers' index that measures activity
in services and manufacturing due on Thursday, after data last
week showed the German economy returned to growth in the first
quarter of 2019. "If we see good PMIs, the euro will form a bottom. It could
be the start of the recovery," said Masafumi Yamamoto, chief
currency strategist at Mizuho Securities.
(Editing by Sam Holmes & Shri Navaratnam)