Dollar lift as Reserve Bank to hold fire on rates The Reserve Bank has affirmed it will hold fire on rates. THE Australian dollar has surged through US95c after the Reserve Bank affirmed it was content to hold fire on further interest rate cuts. And the share market has rallied on the back of growing optimism that an end is in sight for the US debt ceiling stalemate. The "Aussie" jumped more than US0.5c yesterday to its highest level in four months. Last night it was buying US95.44c. It came after the RBA released minutes from its board meeting this month, where directors kept the official interest rate on hold at a 53-year low. Analysts said the minutes reflected a continuing "wait and see" approach to rates. "Members (of the board) agreed that the bank should neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them," the RBA minutes said, echoing a statement in its September minutes. The central bank last cut the cash rate in August, to 2.5 per cent. "Our view remains that the RBA is unlikely to need to cut rates further from here, unless current developments in the US were to deteriorate significantly," HSBC chief economist Paul Bloxham said. Low interest rates will continue to support the Australian housing market, while the recovery in activity will likely continue to broaden. These factors are expected to offset the RBA's concerns about recent currency strength. It came as the Australian share market followed positive leads from Wall St amid hopes that US politicians were close to striking a deal as the debt ceiling deadline loomed. The benchmark ASX 200 index and its broader counterpart, the All Ordinaries, closed 1 per cent higher. On Thursday, the US government - which hit its debt limit in May - is expected to exhaust the "extraordinary measures" it has employed to avoid borrowing more money. On October 31, it is likely to default on its debt for the first time in history unless both sides of politics can agree to raise its self-imposed its $16.7 trillion debt limit. But markets were buoyed after Senate leaders from both parties said progress was being made in talks to break the deadlock. Lonsec client adviser Michael Heffernan said investors were banking on the prospect of a deal being struck. ``That's clearly the main factor at play," Mr Heffernan said. ``The US has got the money to pay the bills, they've just saddled themselves with an artificial construct.