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Shares rise, $A soars past 80 US cents

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The Australian dollar has soared passed 80 US cents for the first time in over two years as diminished expectations for rate hikes in the US dented the greenback.

The share market also rose as stronger iron ore and copper prices boosted mining stocks.

The local currency hit a high of 80.66 US cents, its best value since May 2015, after the US Federal Reserve suggested it was in no hurry to raise interest rates.

CMC chief market analyst Ric Spooner said the Aussie dollar was also boosted by higher commodity prices.

“In the last 24 hours this has been about the US Fed statement,” he said.

“What’s got the market going is that they (the Fed) have changed their wording a little bit to reflect the reality that inflation is remaining low and that has seen the market wind back their pricing for another rate hike by the Fed.”

Australian Industry Group chief executive Innes Willox said the current value of the Australian dollar was outside the comfort zone for manufacturers and businesses in trade-exposed industries.

“There is no single magic Australian dollar value that is perfect for all Australian businesses, but at 80 US cents or less, close to 90 per cent of Australian manufacturers say they can compete in export markets and 70 per cent say they are competitive against imports,” Mr Willox said in a statement.

The Australian dollar was at 80.38 US cents at 1700 AEST, up from 78.91 US cents on Wednesday.

On the share market, the benchmark S&P/ASX200 index rose 0.15 per cent to 5,785 points – its third straight session of gains.

BHP Billiton added 1.1 per cent, Rio Tinto was up 0.6 per cent and South32 added 2.1 per cent.

Fortescue Metals dropped six cents, or 1.1 per cent, to $5.24, after the iron ore miner said it expects to trim its costs further this year and is targeting similar iron ore shipments to the financial year that just ended.

The major banks were relatively steady, with Commonwealth Bank up 0.3 per cent, ANZ and National Australia Bank each up 0.1 per cent, and Westpac down 0.2 per cent.

Macquarie Group firmed $1.04, or 1.2 per cent, to $87.37 as it said it expected to make another annual profit of around $2.2 billion.

ON THE ASX:

* The benchmark S&P/ASX200 was up 8.4 points, or 0.15 per cent, at 5,785 points at 1630 AEST.

* The broader All Ordinaries index was up 8.9 points, or 0.15 per cent, at 5,832.2 points.

* The September SPI200 futures contract was up three points, or 0.05 per cent, at 5,720 points.

* National turnover was 2.2 billion securities traded worth $5 billion.

CURRENCY SNAPSHOT AT 1700 AEST

CURRENCY ASK BID PREVIOUS

AUD/USD 0.8039 0.8037 0.8001

AUD/JPY 89.33 89.28 88.98

AUD/EUR 0.6855 0.6851 0.6821

AUD/NZD 1.067 1.0662 1.0639

AUD/GBP 0.6117 0.6113 0.61

GOLD:

The spot price of gold in Sydney at 1700 AEST was $US1,262.65 per fine ounce, from $US1,245.13 per fine ounce on Wednesday.

BOND SNAPSHOT AT 1630 AEST:

* CGS 4.50 per cent April 2020, 1.8756pct, from 1.911pct

* CGS 4.75pct April 2027, 2.6376pct, from 2.6753pct

Sydney Futures Exchange prices:

* September 2017 10-year bond futures contract at 97.31 (implying a yield of 2.69pct), from 97.28 (implying a yield of 2.72pct) on Wednesday

* Septembert 2017 3-year bond futures contract at 98.03 (1.97pct), from 97.99 (2.01pct).

(*Bond market closes taken at 1630 AEST previous local session)