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Julia Gillard has become Australia's first woman prime minister. The leadership change comes after Kevin Rudd stood down, following a slump in opinion polls and losing his own party's support.
After the news broke, the Australian dollar rose against the U.S. dollar to 0.8771, the highest of the day. But the dollar fell again to 0.8741 after confirmation of Gillard's appointment. Kevin Rudd's support began to slide since he shelved his carbon-trading proposal. Then he put forward a 40 percent tax on profits made on resource projects in Australia, which triggered objection even from his own party.
Analysts say Julia Gillard's leadership will find a compromise on the mining tax, which could boost the value of the Australian dollar.