Reporting from Los Angeles and New York -
Investors worldwide cast more bets Tuesday for an economic recovery, driving stocks and commodity prices higher after a surprise interest rate hike in Australia.
But rising confidence undermined the dollar as a haven. So, too, did fresh rumors that Mideast oil producers want to reduce their reliance on the greenback in pricing crude.
The weakened dollar helped push gold to a record high, above $1,035 an ounce, as faith in the buck waned.
On Wall Street, the Dow Jones industrial average jumped 131.50 points, or 1.4%, to 9,731.25, its second straight gain after pulling back modestly in the last two weeks on worries the economy might be stumbling again.
Those concerns took a back seat Tuesday after Australia’s central bank raised its benchmark short-term interest rate to 3.25% from 3%.
Although stocks usually react badly to rising rates, in this case Australia’s move — the first increase by any major central bank this year — underscored the idea that the global economy was rebounding.
“The risk of serious economic contraction” in Australia has passed, the central bank said in a statement.
The decision …
Read the original article at Latimes
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