London — World shares took a fresh run at record highs on Thursday, as all the right messages from the US Federal Reserve set traders up nicely for a packed day of milestone central bank meetings and a Brexit-defining election in Britain.

The Fed kept US interest rates unchanged, as expected, but it was a message that it would take an unexpected and “persistent” rise in inflation to lift them again that buoyed the bulls and shoved the dollar to its lowest since August.

It helped Asian shares rally almost 1%, despite reports that Washington will press on with new China tariffs, and solid 0.2%-0.5% gains in Europe early on left MSCI’s broadest index of world shares just 0.1% shy of its January 2018 all-time high.

“The Fed’s accommodative stance does support equities, but the chance of a disruptive election outcome in Britain is very real,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

Traders are bracing for a series of make-or-break events over the next few days that have the potential to cause huge swings in financial markets for months to come.

Sterling was hovering at its highest in more than two years compared to the euro and close to an eight-month high against the dollar as voting began in an election that will determine whether Britain exits the EU in January.

Expectations are that the ruling Conservatives, led by Prime Minister Boris Johnson, will score a majority that allows his Brexit deal to be passed by a new parliament, but the latest polls have shown the lead shrinking.

Exit polls for Britain’s election will begin at around 10pm GMT, after voting closes, with clarity over whether there will be a clear winner or another hung parliament likely between 4am GMT and 6am GMT.

Following a 10% surge by the pound in the past few months, traders and investors are now hedging their bets. Union Bancaire Privée’s global head of forex strategy Peter Kinsella said a Conservative majority remains his expectation, however. “We think a move to levels of about $1.35 or even $1.37 is entirely feasible,” if there is a decent Conservative majority, whereas with another hung parliament “you are definitely back down to $1.26-$1.27”.

It was last at $1.3205, just shy of its highest since March and close to a May 2017 peak against the euro at 84.32p.

Central banks at play

The euro was also climbing against the weakened dollar. It rose as far as $1.1144, close to a five-week high before Christine Lagarde’s first meeting as president of the European Central Bank (ECB). She is almost certain to keep rate rates on hold, but her style and signals will be closely watched by economists, especially with the bank due to update its forecasts and make some changes to its policy framework next year.

The Swiss National Bank (SNB) had got up early and already held its rate meeting, meanwhile. Negative interest rates remain central to its plans, the SNB’s chair Thomas Jordan said as it maintained its ultra-expansive monetary policy. The Swiss franc barely budged.

There were fresh US-China developments to digest too. US President Donald Trump is expected to meet top advisers on Thursday to discuss tariffs on nearly $160bn of Chinese consumer goods that are scheduled to take effect on December 15, three sources told Reuters. Trump is expected to go ahead with the tariffs, a separate source told Reuters, which could scuttle efforts to end a 17-month long trade dispute between the world’s two-largest economies.

The dollar index against a basket of six major currencies fell 0.3% to 97.057, briefly touching a new four-month low.

US treasury yields had fallen in reaction to the Fed’s comments, but they rebounded slightly in Asia and Europe. The yield on benchmark 10-year treasury notes rose to 1.7966%.

In commodities, US crude edged up 0.15% to $58.85 a barrel. Brent crude rose 0.39% to $63.97 a barrel. A report by oil cartel Opec released on Wednesday suggested that oil markets are tighter than previously thought.

Traders are also focused on state oil company Saudi Aramco. Its value brushed $2-trillion on Thursday as its shares surged again following its Riyadh stock market debut on Wednesday.