Optimism about further interest rate cuts in Australia and the United States has helped propel global shares to record levels and the greenback to a three-year low as investors brush off concerns over the conflict in the Middle East.

The shift in sentiment was sparked by US data that pointed to a slowdown in the world’s largest economy. Consumer spending grew in the first three months of the year at the softest pace since the onset of the COVID-19 pandemic, causing gross domestic product growth to slide at a downwardly revised 0.5 per cent.