Aussie dollar on the rise

The Australian dollar has jumped to $US0.8511 at around midday today after the US Federal Reserve delighted the market with a half a per cent interest rate cut.

The Aussie dollar started the day above US85c for the first time since early August, with pundits predicting it will rise to US86c in the next week.

The US Fed has cut official interest rates for the first time since 2003 in an attempt to ease fears around the sub-prime crisis and the credit crunch.

Local shares also opened strongly this morning, but the ASX/200 index fell back a bit to 6330.1, and All Ordinaries fell to 6337.6.

Meanwhile US stocks jumped by the most in four years yesterday with the Dow Jones Industrial Average jumping 2.51% to end at 13,739.39 while the Standard & Poor’s 500 Index leapt 43.13 points to 1,519.78.

Meanwhile in breaking news, Coles Myer suffered a 9.5% fall in earnings for food and liquor and a 3.9% drop in second half earnings to $291.1 million.

Profit rose 0.6% to 792.4 million for 12 months to July 29, which was in line with expectations. Management described the results as “disappointing and difficult”.

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