Investors have dismissed worrying developments on global markets this week to propel Australian shares and the dollar higher.

The benchmark S&P/ASX200 index has risen as much as 51.9 points, or 1.13 per cent, to 4657.4, while Australian dollar lifted to 1.0781 US cents, remaining 1 US cent higher than where it was before yesterdays strong jobs data was released.

The markets strength comes despite a string of events that typically rattle equities traders nerves because of their potential to slow economic growth or generate fear for investments.

China surprised the market by lifting its interest rate yesterday and the European Central Bank raised interest rates although the debt-strapped nations of Greece, Spain and Portugal are struggling with weak growth.

Austock client adviser Michael Heffernan said the market was seeing only the positives.

The market has more or less factored in the events that have been happening like the ratings agency downgrading Portugal (this week), he said.

Earlier this week, Moodys downgraded Portugals credit rating, triggering harsh words from European finance leaders for US ratings agencies. While in the US, the showdown over the lifting of the national debt ceiling continued to loom.

There have been some smaller bright spots other than the surprise 59,000 full-time jobs created in Australia in June announced yesterday, including an unofficial jobs reading in the US overnight rising by three times the amount expected by economists.

Mr Heffernan said bullish investor sentiment showed traders were expecting the US to lift its debt ceiling to avert a government shutdown in Washington.

CMC Markets senior FX dealer Tim Waterer said the local currency nudging $US1.08 was possible, despite the euro zone ratings downgrades, Chinese local government debt issues and a dovish RBA statement.

At the start of the week, had you said that there will be more euro zone ratings downgrades, Chinese local government debt issues and a dovish RBA statement, it would have been difficult to envision the Australian dollar knocking on the door of $US1.08 any time soon.

But here we are, with the Australian dollar having moved to within a quarter of a cent of $US1.08 following a bumper night on global markets, which saw stocks and commodities all pushing higher, said Mr Waterer.

The theme this week has been for negative news to be met with subdued selling, whilst good news stories have been readily embraced resulting in disproportionately higher moves to the upside compared to the down-side, he said.

Non-farm payrolls in the US, to be released this evening Australian time, could further bolster the Aussie dollar and markets overall, he said. Analysts are expecting 80,000 jobs to have been created in June, up from 54,000 in May, according to Briefing.com.

Mr Heffernan said even if the US unemployment rate doesnt improve with the release of labour data tonight, the American market will likely take the negative news in its stride.

The market is tipping the US unemployment rate to remain steady at 9.1 per cent.

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