AUD/USD Hits Fresh Highs Before Retracing

AUD/USD got close to 0.7140 overnight (fresh highs back to early June), but drifted lower into the NY close. Dips sub 0.7100 were supported, and we currently track around 0.7105/10. The A$ has outperformed the rest of the of the G10 complex over the past 24 hours (except for NZD).

• The DXY got to Wednesday's lows around 104.64 before support kicked, which also coincided with the AUD/USD high. US equities couldn't sustain early gains and edged lower into the close, with tech underperforming. The US VIX push back above 20%.
• AUD/JPY largely held onto gains though. After touching 94.60, fresh highs back to late July, we are drifting a little lower sub 94.50 presently.
• JPY likely showed a greater beta to higher US yield moves overnight, although much of the focus was at the back end of the curve, as we saw a continuing steeping in the 2/10s (back to -33bps versus -48bps in terms of recent lows).
• Commodities were mostly supportive for the AUD. Brent crude pushing back towards $100/bbl, with the Bloomberg sub commodity index gaining +4.40%. Base metals were also higher, +2.3%. Iron ore largely tracked sideways though around $111-$112/tonne.
• AUD/NZD has continued to generally track lower. The pair is back to 1.1040 now, sub the 50 day MA at 1.1062. This weakness is slightly larger than implied by relative yield spreads.
• The domestic data calendar is empty today.