Australian share market, dollar rise on back of US Federal Reserve's interest rates caution

The share market has rallied after the US Federal Reserve kept interest rates on hold and suggested there would be fewer rate rises this year than previously expected.

The news also boosted oil, gold and the Australian dollar.

The All Ordinaries index gained 1 per cent to close at 5,226 and the ASX 200 index added 49 points to finish on 5,168.

Energy stocks led the way on the bounce for oil prices with oil and gas producer Santos adding 5 per cent to close at $3.99.

Mining stocks were also strong and Fortescue Metals fared the best in the sector, up more than 9 per cent to $2.65.

The big four banks all advanced but the Commonwealth Bank performed the best, up 1.8 per cent to $77.38.

Retailer Myer had some of the biggest gains of the day after the department store boosted its full-year profit forecast.

Myer posted a 4 per cent fall in half-year net profit to $59.5 million, which was better than analysts had expected.

Sales growth was the strongest in six years and Myer shares jumped by 12.7 per cent to $1.24.

In other company news, the logistics firm Qube closed 4.3 per cent higher at $2.30 after coming out of a trading halt.

Qube is selling shares to raise money to fund its part of a joint takeover of the port and rail giant Asciano.

Australian dollar gains on Fed announcement

In economic news, the unemployment rate fell unexpectedly in February to a seasonally adjusted 5.8 per cent.

The Bureau of Statistics figures show total employment growth was almost flat, suggesting people had dropped out of the labour force.

The news added to the Australian dollar's strong gains after the earlier announcement by the Fed.

It soared to an eight-month high of 76.2 US cents but later settled and about 5:00pm AEDT was buying 76 US cents.

The dollar was also buying 67.8 euro cents, 85.3 Japanese yen and 53.4 British pence.

Checking commodities and spot gold is higher at $US1,258 an ounce and Brent crude had risen to $US40.53 a barrel.

Source: ABC News

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