Australia central bank lifts rates

Australia's central bank raised interest rates to an 11-year high on Wednesday saying the economy had to slow to contain inflation, leaving the door open for further hikes.

The rate rise is the first ever during a national election campaign in Australia, where rising mortgage rates are a sensitive topic, dealing a blow to a coalition government trailing the opposition in opinion polls ahead of a Nov. 24 vote.

In a widely anticipated move, the Reserve Bank of Australia (RBA) lifted its key cash rate a quarter of a percentage point to 6.75 %, the second rise in four months and the 10th in a tightening cycle that began in mid-2002.

Euro jumps to record high vs. dollar

The euro hit a record high against the dollar on Wednesday, hurt by ongoing worries of financial firms' losses from the credit market turmoil and expectations for the Federal Reserve to cut interest rates further.

USD declined after Fed Governor Randall Kroszner said conditions for subprimemortgage borrowers may worsen.

The euro's rise also came after a senior Chinese political figure said on Wednesday that China should diversify its USD 1.43 trillion stockpile of foreign exchange reserves by buying more strong currencies such as the euro.
EUR/USD traded between 1.4555 & 1.4666

Gold and silver hit multi-year highs

Gold hit its best level in nearly three decades on Wednesday, silver roared to a 27-year high and platinum set another record as investors turned to precious metals as a hedge against inflation and a tumbling dollar.

In addition to record-high oil, expectations the U.S. Federal Reserve will slash interest rates further and uncertainty in the U.S. credit market spurred buying. Gold is eyeing an alltime high of USD 850 reached in January 1980.