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U.S. agreement on debt limit good for Australian economy: treasurer

08-01-2011 16:26 BJT

CANBERRA, Aug. 1 (Xinhua) -- Australian federal Treasurer Wayne Swan on Monday said the agreement among U.S. congressional leaders will lift the cloud of uncertainty in global economy and will be good for Australian economy.

U.S. President Barack Obama said leaders in both houses of Congress had agreed to a plan that would initially cut about one trillion U.S. dollars from U.S. spending over a decade, allowing the debt limit to be raised.

U.S. local shares surged around two percent in relief that a U. S. default had been avoided.

Swan is pleased a deal had been struck after weeks of political wrangling, saying it was important for the global economy to see the United States is dealing with its deficit and debt.

"It's an important first step," ABC Radio quoted Swan as reporting on Monday.

"If they can demonstrate that, we'll see a lot more confidence in global markets and that can only be good for the global economy and, of course, the Australian economy."

The Australian share market rallied strongly on the announcement, with the All Ordinaries Index up 83 points to 4,583 and the ASX 200 two percent higher at 4,511.

The Australian dollar also lifted to 110.53 U.S. cents shortly after the announcement.

Editor:Wang Xiaomei |Source: Xinhua

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