ASX set to rise again after breaking COVID ceiling

New York Stock Exchange

The Australian sharemarket is set to rise again after a record-breaking close on Thursday that saw it smash through the COVID ceiling.

As of 7:30am, ASX 200 futures were up 0.5 per cent to 6,935.

The benchmark finished Wednesday at its highest level in almost 14 months, a time before the pandemic crashed the market.

The Australian benchmark also hit 6,934 points during trade on Wednesday, which is another peak not seen since early 2020.

The Australian dollar is slightly lower (-0.1pc) against the greenback and most other major currencies in early morning trade.

That is as the US dollar gains slightly and its markets edged very slightly higher.

CBA analysts said they had updated its view of where the Australian dollar would go on the basis of commodity prices and the two-year interest rate differential.

“We find that the fair value range for AUD/USD remains broadly unchanged at 0.78 to 0.89 in March (centred on 0.83), supported by firm commodity prices,” they said. 

“AUD/USD is currently trading below the level implied by its fundamentals. 

“We expect AUD/USD undervaluation to persist in the near term amid broad USD strength. 

“Our expectation for commodity prices to remain firm in coming months will also be a key factor supporting the recovery in AUD.”

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