Regional markets edged higher this morning as the Australian dollar hit a 26-month high and U.S. futures hinted at a positive start to tonight's trade.
At lunchtime the ASX 200 was ahead 7 points or 0.15% at 4624 as strength in the big banks and health, energy and consumer stocks off-set weakness in property trusts, telecoms and industrials.
"The Australian market is holding slight gains after undeperforming the U.S. this week," Chris MacDonald, Investment Adviser at RBS Morgans told MarketWatch. "There's scope for profit taking in global equities after such a fantastic run this month. But you did have the Fed hinting that it's preparing for further quantitative easing, which would be bullish for equities."
Dow futures were 0.34% up at +36 as traders digested last night's gyrations on Wall Street following the Federal Reserve's pledge to help the economy.
The Australian dollar was one of the main beneficiaries of the Fed announcement, smashing through the 95 U.S. cent barrier overnight as the greenback plummeted. The dollar was recently buying 95.63 U.S. cents after earlier hitting 95.8c.
Also helping the dollar were the rising odds on interest rate increases after an index of future economic activity this morning flagged a strong outlook. The WBC-MI leading index clocked annualised growth of 6.8% in July, ahead of the long-term trend of 3.2%.
Asian markets inched north. Japan's Nikkei was up 0.03% and Hong Kong's Hang Seng up 0.93%.
Crude oil futures rebounded by 24 cents this morning to $75.06 a barrel. The spot gold price held its overnight gains, up $1.20 at $1,288.20 an ounce.
Congratulations to the AVB traders this morning, and especially to Poly2006, who has been calling the action better than Rabbits Warren. I took a few points out of the latest run. My other trades today were COK and MGX, both on pullback and relatively low risk this close to support.
