The Australian dollar has jumped markedly and the local market looks set to open higher, following Wall Street's positive lead, after the release of the Federal Reserve's last policy meeting minutes.
At 0700 AEST on Thursday, the Australian dollar was trading at 75.06 US cents, up virtually half a US cent, while the share price futures index was up 12 points, or 0.21 per cent, at 5,786.
In the US, stock markets ended slightly higher, with the S&P 500 hitting a record high close, after minutes of the Fed's May 2-3 meeting showed that policymakers viewed a rate rise as coming soon but agreed they should hold off until they know a recent US economic slowdown is temporary.
Stocks were volatile following the minutes' release, but eventually added to small earlier gains. The S&P financial index, which fell right after the minutes came out, rebounded to end down just 0.04 per cent. Banks tend to benefit from higher borrowing rates.
The Dow Jones Industrial Average was up 0.36 per cent at 21,012.42, the S&P 500 gained 0.25 per cent to 2,404.39 and the Nasdaq Composite added 0.40 per cent to 6,163.02.
The Aussie dollar recovered from the losses it suffered on Wednesday after Moody's first ratings downgrade on China since 1989 renewed concerns about the economic strength of Australia's key trading partner.
The local currency hit a low of 74.43 US cents after the ratings agency downgraded China's long-term credit rating to A1 from Aa3, reflecting its view that China's financial strength will weaken in the coming years as economy-wide debt rises and potential growth slows.
It later recovered somewhat, to stand at 74.59 US cents at the end of the trading day.
Locally, in economic news on Thursday, Reserve Bank of Australia governor Guy Debelle is slated to deliver the opening remarks at the launch of the FX Global Code at 1800 AEST.
In equities news, Aristocrat is expected to post half-year results, while Adelaide Brighton holds its annual general meeting in Adelaide.
The Stockbrokers and Financial Advisers conference wraps up in Sydney and the two-day Australian Retail Banking Summit starts, also in Sydney.
The Australian market on Wednesday closed slightly higher with the miners and major banks lower, but most other sectors stronger.
The benchmark S&P/ASX200 index rose 8.8 points, or 0.15 per cent, to 5,769 points.
The broader All Ordinaries index gained 8.7 points, or 0.15 per cent, to 5,811.5 points..
CURRENCY SNAPSHOT AT 0700 AEST:
One Australian dollar buys:
* 75.06 US cents, from 74.59 on Wednesday
* 83.69 Japanese yen, from 83.46 yen
* 66.88 euro cents, from 66.73 cents
* 57.85 British pence, from 57.50 pence
* 106.48 New Zealand cents, from 106.41 NZ cents
BOND SNAPSHOT AT 0742 AEST:
* CGS 4.50 per cent April 2020, 1.7051pct, from 1.7050pct
* CGS 4.75pct April 2027, 2.485pct, unchanged
Sydney Futures Exchange prices:
* June 2017 10-year bond futures contract at 97.535 (implying a yield of 2.465pct), from 97.485 (2.515pct) on Wednesday
* June 2017 3-year bond futures contract at 98.27 (1.73pct), from 98.25 (1.75pct).
(*Currency closes taken at 1700 AEST previous local session, bond market closes taken at 1630 AEST previous local session)