Downside Support For The A$ Holding For Now

AUD/USD dips to 0.6900 were supported overnight, while the pair rebounded to 0.6970 on a couple of occasions, it couldn't sustain these gains amidst broad USD strength. AUD/USD has shed 0.25% in the past 24 hours, but is the best performer on a relative value basis within the G10 complex. The currency tracks around 0.6915 currently.

• The commodity FX complex (AUD, NOK, CAD & NZD) all fell less against the USD compared to the likes of EUR, GBP and JPY overnight.
• Higher oil prices helped, with Brent crude back above $96.50/bbl, but the rest of the commodity bloc was more mixed. The Bloomberg sub-index for energy prices rose by 1.24% but the aggregate index was just positive (0.09%), while base metals was flat. Copper gained but softer sentiment was evident elsewhere,
• For the A$, iron ore edged down slightly to the low $101/tonne region. Concerns around the China property sector continue to outweigh an improved infrastructure backdrop.
• Despite, on balance, better US data (particularly the Philly Fed survey (+6.2 v -5.0 expected), US yields were lower (US 2y off -9bps to 3.20%). The AU-US 2yr spread ended yesterday around -45bps, up off lows for the week.
• Offshore equities managed small gains, while the VIX trended slightly lower to 19.50%. We remain around recent lows for this measure of risk aversion.
• There isn't anything on the domestic data calendar, with the next data release out next Tuesday with the preliminary PMI readings for August on tap.