Key Takeaways:
The Australian dollar surged to a 2-year high of $0.7227 on Wednesday, gaining about 0.6 percent as the US dollar weakened on signs of easing geopolitical tensions and continued investor enthusiasm for technology stocks.
"Markets embraced a sense of calm and stability overnight, with the risk of escalation in the Middle East conflict viewed as having diminished," analysts from Westpac wrote in a research note.
The US dollar index, which measures the greenback against a basket of six major currencies, fell 0.1 percent to 98.236, snapping a three-day winning streak. The move came after former US President Donald Trump announced "great progress" toward a potential agreement with Tehran, prompting a brief pause in military escorts for ships in the Strait of Hormuz. The news sent Brent crude tumbling 1.2 percent to $108.51 per barrel. The Aussie's strength was also underpinned by the Reserve Bank of Australia delivering a third straight interest-rate hike a day earlier.
The improved risk appetite fueled a broad rally in global equities. MSCI's broadest index of Asia-Pacific shares outside Japan jumped 2.3 percent to a record, while South Korea's Kospi surged 5.1 percent to clear the 7,000 mark for the first time. On Wall Street, the S&P 500 rose 0.8 percent to a fresh record. "Investors bought and continue to add to positioning in the 2026 winners," said Chris Weston, head of research at Pepperstone Group Ltd. "It's tech that continues to attract the bulk of flows."
The technology-led enthusiasm was highlighted by a 12 percent jump in Samsung Electronics, which saw its market value top $1 trillion. In extended trading, shares in Advanced Micro Devices jumped 16.5 percent after it forecast strong second-quarter revenue based on keen demand for its AI chips. Elsewhere in currency markets, the euro rose to $1.1724 and sterling climbed to $1.3577. The yield on the US 10-year Treasury bond was flat at 4.424 percent, while gold was 1.2 percent higher at $4,609.59 an ounce.
This article is for informational purposes only and does not constitute investment advice.
