Closing Bell 2nd November: Uncertainty Looms Despite ASX Gains, as Future Rate Hikes Remain Possible

Australian Dollar Rises Post-Fed Decision 

The Australian dollar surged to a three-week high of US64.10¢, influenced by the Federal Reserve’s decision to maintain existing interest rates. The market interpreted Fed Chairman Jerome Powell’s remarks as an indication of peaked interest rates, enhancing the appeal of risk assets. Despite Powell not discussing rate cuts, investors perceived a balanced policy view, casting doubts on further rate hikes.

Bitcoin Soars to a 17-Month Peak 

Bitcoin has escalated to a 17-month high, reaching $US35,000, spurred by intense activity in the derivatives market. The cryptocurrency experienced a 28% rally last month, fueled by anticipations of the US Securities and Exchange Commission possibly approving cryptocurrency-focused exchange-traded funds, marking the most significant monthly increase since January.

Optimistic Forecast for Iron Ore Prices 

Citi predicts a potential rise in iron ore prices, reaching $US130 a tonne by year’s end, contingent on China amplifying its policy stimulus. This week, iron ore prices soared to a five-week high due to expectations of increased demand from China, coupled with significant producers like Vale SA expressing optimism regarding price uptrends due to China’s supportive stance on infrastructure activities.