FOREX-Growth-linked currencies surge to multi-week highs on risk rally

viernes 9 de octubre de 2015 07:05 GYT

* Fed minutes show policymakers cautious about hiking rates

* Aussie hits 7-week high, best weekly gains since end-2011

* Dollar index nurses losses, hits 3-week low (adds Morgan Stanley note on U.S. dollar)

By Anirban Nag

LONDON, Oct 9 (Reuters) - Commodity and growth-linked currencies like the Australian dollar surged on Friday, and were set to end the week on a high note on the back of a risk-taking rally that put the safe-haven yen under pressure.

The dollar index, meanwhile, was set for its second week of losses, after the minutes of the Federal Reserve's September meeting reinforced investors' expectations that U.S. interest rates are unlikely to rise until well into 2016.

Thursday's Fed minutes focused on external factors depressing the outlook for inflation which, analysts said, suggested rates were likely to stay lower for longer, fuelling appetite for riskier assets.

The Australian dollar hit a 7-week high and was set for its strongest weekly performance since late 2011, while oil prices surged to their highest in three months. That lifted some of the gloom that enveloped riskier asset classes like stocks and commodities in August and early September when worries about a global slowdown and China weighed on sentiment.

"A risk rally is very much on, and the dollar-bloc commodity currencies are doing well," said Jeremy Stretch, head of currency strategy at CIBC World Markets. "Having said that, I would be cautious about chasing them much higher as the Fed is still in play."   Continuación...