Australian Dollar Falls at New 4-year Low on Fed Outlook

Marcus Jacob
18 Dec, 2014
New York City

Stocks in Australia closed higher following a rebound in Asian markets after the U.S. Fed left its key rate unchanged showed patience towards rate hike in 2015. Lovisa Holdings completed its $2 a share initial public offering and said annual sales rose 30%.

[R]5:30 PM Sydney – Stocks in Australia closed higher following a rebound in Asian markets after the U.S. Fed left its key rate unchanged showed patience towards rate hike in 2015. Lovisa Holdings completed its $2 a share initial public offering and said annual sales rose 30%.[/R]

Stocks in Sydney rebounded after a week of lacklustre trading following a surge in U.S. markets in overnight trading after the Federal Reserve showed no hurry to increase rate in 2015.

As widely expected, the Fed left its key interest rate target between zero and 0.25% at the last meeting of the year but lowered the estimate for the inflation and jobless rate in 2015 from its previous meeting in September.

The Fed estimated jobless rate at 5.2% and inflation to be lower than 1.6%, below the central bank’s target of 2%.

Fed’s policy committee also debated the implication of recent price decline and global markets volatility but decided to gravitate on the long term positive forces unleashed form the cheaper fuel and steady increase in job creation.

Australian dollar closed at 81.37 U.S. cents and in stock-trading turnover soared to 1.01 billion shares worth $6.4 billion.

ASX 200 Index jumped 48.90 or 0.9% to 5,210.80 and broader All Ordinaries Index increased 49.10 to 5,189.70.

In commodities trading, gold edged up $1 at US$1,199 an ounce and light crude oil rose 53 cents to US$56.79 a barrel.

IPO

Perpetual Equity Investment Company Limited the investment company priced its initial public offering for $1 a share and closed at 97.5 cents.

Lovisa Holdings Limited surged 7% after the jewellery retailer priced its initial public offering at $2.

The stock opened at $2.12 and closed at $2.14.

Australian Stock Movers

Devine Limited closed unchanged at 92 cents after the home builder and property developer lifted pre-tax profit forecast for the year to $10.8 million from earlier estimate of $9.8 million.

Mirvac Group gained 0.8% to $1.81 after the real estate developer signed an agreement to sell 50% stake of its Melbourne-based two office development projects for $106 million.

Lovisa Pty Limited, the jewelry retailer said revenues in the year ending in June climbed 30.2% to $91.53 million from $70.29 million a year ago period.

Profit for the year declined 31.2% to $3.71 million compared to $5.39 million a year ago period.