The benchmark S&P/ASX200 index on Friday finished 42 points, or 0.55 per cent, higher at 7,629.0, while the broader All Ordinaries rose 48.1 points, or 0.61 per cent, to 7,897.5.
For the week, the ASX200 rose 0.7 per cent, its second week of gains.
Westpac economist Jameson Coombs said risk sentiment had improved as Fed chairman Jerome Powell's remarks continued to soothe markets.
Interest rate markets had upped the chances for a second US rate cut this year to 50/50, with the first cut fully priced in for November, Mr Coombs said.
Traders will be watching carefully Friday night's US non-farm payroll report, the latest test of the strength of world's largest economy and the inflationary pressures facing it.
The consumer discretionary sector was the biggest gainer on Friday, closing up 2.0 per cent, with Wesfarmers rising 2.8 per cent to $68.31 as investors pondered presentations from the conglomerate's strategy day sessions on Thursday.
Elsewhere in the sector, Temple & Webster rose 5.0 per cent, Star Entertainment Group rebounded by 6.1 per cent and Lovisa added 2.7 per cent.
In the heavyweight mining sector, goldminers were well in the red as the precious metal dipped just below $US2,300 an ounce.
Evolution fell 5.6 per cent, Bellevue Gold slipped 3.2 per cent and Resolute Mining dropped 4.6 per cent.
Elsewhere in the sector, BHP and Rio Tinto both edged 0.1 per cent higher, at $42.41 and $129.24, respectively, while Fortescue rose 0.4 per cent to $25.66.
All of the Big Four banks finished higher, with Westpac rising 1.5 per cent to $26.42, ANZ adding 0.9 per cent to $28.48, NAB growing 0.4 per cent to $34.40 and CBA finishing up 0.2 per cent at $115.23.
But Macquarie dropped 2.2 per cent to $183.83 after announcing its full-year net profit had dropped by nearly a third to $3.5 billion.
"Macquarie's performance appears tepid, with both revenue and earnings retreating from the previous year's levels," said Saxo Asia Pacific senior sales trader Junvum Kim.
"Persistent macroeconomic instability persists as a major hurdle in reigniting growth, with the commodities arm facing a steep 47 per cent dive in profit contributions from one year prior."
The Australian dollar was buying 65.73 US cents, from 65.42 US cents at Thursday's ASX close.
Looking forward, the Reserve Bank is expected to leave interest rates on hold at 4.35 per cent when it meets on Tuesday.
AMP chief economist Shane Oliver said the RBA was likely however to signal it was returning to a mild tightening bias, after having moved to a neutral bias at its March meeting.
For example, the central bank might say that a further rise in rates "cannot be ruled out," language it last used in February, said Dr Oliver, who views an actual hike as unlikely.
Despite chatter about a possible RBA rate hike, there was not much evidence of an upswing in the Australian economy that would justify a rate hike, he said.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Friday up 42 points, or 0.55 per cent, at 7,629.0
* The broader All Ordinaries rose 48.1 points, or 0.61 per cent, to 7,897.5
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.73 US cents, from 65.42 US cents at Thursday's ASX close
* 100.69 Japanese yen, from 101.67 Japanese yen
* 61.27 Euro cents, from 61.01 Euro cents
* 52.38 British pence, from 52.21 pence
* 110.12 NZ cents, from 110.02 NZ cents
