The Australian equity has opened the day strong after the Dow notched its biggest gain for this year, investors saw optimism on President Barack Obama’s praise for a $3.7 trillion deficit-reduction plan and the strong earnings of International Business Machines.
The Dow traded up 1.63% to finish at 12587 as twenty seven of the 30 components finished higher, led higher by IBM reported quarterly growth in all of its major businesses while the S&P500 index rallied 1.6% to finish 1326.73.
Both markets were significantly higher on the support for a deficit-reduction plan coming out of a bipartisan Senate group. President Barack Obama said overnight that the proposal, which would modify entitlement programs like Social Security and rework the tax code, represents a “very significant step” forward in deficit talks.
The USDJPY advanced for the first time in three days trading from lows overnight of 78.82 to as high as 79.28 as Barack Obama endorsed the deficit cutting proposal by a bipartisan group of senators.
The EURUSD had a choppy overnight session trading from a high of 1.4218 to a low of 1.4109 as the Greek Prime Minister George Papandreou said that Europe’s leader need to show that they can resolve the European Union debt crisis to avoid a contagion enveloping Italy and Spain.
Gold fall from the 31 year high trading from a high of 1610 to a low of 1582.
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Source Bloomberg, Dow Jones News