Australian shares surge as dollar goes on a roller coaster ride
The Australian share market roared back to life today with shares taking a confusing lead from US markets.
EML's troubled Irish business has lost its entire board
US inflation figures, which showed the economy was still overheated and inflation was at a 40 year high, should have sent the US market into a tailspin and for a while it did.
But then came a rebound. The Dow Jones index ended up 2.8 per cent and nearly 1400 points above its session low point. The S&P 500 rose 2.6 per cent to 3,669.88, while the tech-rich Nasdaq advanced 2.2 per cent to 10,649.15.
This morning the Australian markets responded rising almost 2 per cent before paring back some of those gains. The Australian dollar also went on a wild ride falling below US62 cents at one stage, but recovered to trade at US63 cents.
ANZ said the fall in the Australian dollar over recent months could force the hand of the Reserve Bank to increase interest rates.
The bank said the weakness in the currency would “ultimately limit the extent to which the RBA can lag behind the rate hikes of other central banks.
“We struggle to see the RBA getting the traction it needs to get core inflation sustainably within the 2 to 3 per cent target band without taking policy into restrictive territory. In our view this is north of 3 per cent.”
Virgin Money led the way on the ASX with a rise of more than 10 per cent while Domino’s, a company that has been attracting short sellers recently, was up 7 per cent in early trade on the ASX.
There were gains in energy and tech stocks, but metal miners were being hit. Coal producer New Hope was up 2.5 per cent to $6.89 following reports from the company that it had been flooded with applications for jobs at the Acland mine.
Terracom was up 1 per cent.
Qantas, which yesterday forecast a booming return to underlying profit after losing billions during Covid, was up another 1.78 per cent after Citi upgraded its advice to a neutral