The local share market has gained ground after the US finally put its debt ceiling drama in the rear window with Senate passage of a compromise measure that avoids a catastrophic default.
But markets were also digesting the possibility of even more interest rate hikes in Australia, perhaps as soon as soon as Tuesday, following the biggest increase in minimum award pay in decades.
The benchmark S&P/ASX200 index on Friday finished up 34.3 points, or 0.48 per cent, to 7,145.1, while the broader All Ordinaries rose 40.5 points, or 0.56 per cent, to 7,331.2.
For the week, the ASX200 fell 9.7 points, or 0.13 per cent - its second weekly loss in a row, although it is yet to fall in June.
In Washington, the Senate passed a bill suspending the US borrowing ceiling for two years, resolving a stalemate that had left the world's most powerful nation on the brink of a catastrophic default on its debt.
With President Joe Biden set to sign the measure into law on Friday, KCM Trade market analyst Tim Waterer said traders around the world were breathing a sigh of relief the crisis had been averted.
"With the House and Senate having passed the bill, financial markets now have one less thing to worry about, resulting in a move higher in risk assets," Waterer wrote.
Closer to home, economists were raising their forecasts for rate hikes after the Fair Work Commission decided to raise the minimum wage award by 5.75 per cent, a boost expected to add to already challenging labour costs.
RBC Capital Markets chief economist Su-Lin Ong was one of several analysts who anticipated the Reserve Bank would now hike rates twice more, rather than once.
"If the RBA opts to pause again next week, hikes in July and August are likely," she wrote.
The mining sector was the biggest gainer on Friday, climbing 2.4 per cent in its best single-day performance since November.
BHP added 2.8 per cent to $43.25, Rio Tinto climbed 2.5 per cent to $110.15 and Fortescue Metals grew 1.7 per cent to $19.69 as the iron ore miner appointed a new chief financial officer, Christine Morris.
Gold miners and lithium miners also rose, with Newcrest up 4.6 per cent and Pilbara climbing 3.0 per cent.
The big banks were mixed, with CBA and ANZ edging slightly higher, Westpac down 0.3 per cent and NAB falling 1.0 per cent to $25.79.
Consumer-facing stocks where labour costs are a big expense were lower following the Fair Work Commission ruling.
Woolworths fell 1.4 per cent, Coles dropped 1.7 per cent, Endeavour Group retreated 1.4 per cent and Wesfarmers dipped 0.3 per cent.
Adairs plunged 14.9 per cent to a nine-month low of $1.605 after the furniture retailer said group sales were down 7.0 per cent in the past 21 weeks to May 28.
"The impact of rising interest rates and higher cost of living has created a more subdued trading environment since April, with lower traffic observed both in stores and online," the company said.
On the flip side, Appen soared 15 per cent to an almost nine-month high of $3.76, finishing the week more than 50 per cent higher.
The Sydney-based company, which makes datasets for tech companies to train artificial intelligence algorithms, has been the apparent beneficiary of a rally in all things AI-related.
Paladin Energy rose 10.7 per cent to 67c and Deep Yellow climbed 12.6 per cent to 71.5 after the government of Namibia - where both companies are working on uranium mines - denied media reports it was poised to partially nationalise its resource industry.
The Australian dollar rose to a 10-day high against the greenback after the FWC decision, as traders apparently bet it would lead to higher rates.
The Aussie was buying 66.10 US cents, from 64.92 US cents at Thursday's ASX close.
Looking forward, the US will report May jobs data on Friday night that will likely help determine whether the Federal Reserve again hikes interest rates at its next meeting in two weeks' time.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday up 34.3 points, or 0.48 per cent, at 7,145.1.
* The broader All Ordinaries gained 40.5 points, or 0.56 per cent, to 7,331.2.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.10 US cents, from 64.92 US cents at Thursday's ASX close
* 91.85 Japanese yen, from 90.75 Japanese yen
* 61.41 Euro cents, from 60.81 Euro cents
* 52.75 British pence, from 52.25 British pence
* 108.50 NZ cents, from 108.25 NZ cents
