A$ Surges Ahead

AUD/USD touched a high just above 0.6990 overnight. We aren't too far away from those levels currently (last at 0.6980). The currency was the best performer in the G10 FX space over the past 24 hours. The currency is up just 1% over this period, with NZD the next best at +0.70%. The AUD/NZD cross pushed above 1.1200.

• The DXY ended the NY session off the lows (108.40, versus 108.00 late yesterday), with EUR continuing to underperform other majors. AUD/EUR is now close to 0.7000, fresh highs back to May 2017.
• Commodity prices, which have been a key driver of A$ outperformance on crosses, consolidated overnight. The headline Bloomberg index dipped 0.48%, for its first fall in a week (mainly on lower oil). However, the base metals index firmed 1%, while iron ore holds around $104/tonne.
• ANZ noted earlier this week that dividend related inflows (from mining companies) is a saw of AUD support at the moment(see this link).
• Higher equities also helped, with the US VIX falling back below 22%. AUD/JPY is now back above 95.25, fresh highs back to late July.
• US yields were lower (US 2yr -2.4bps to 3.37%), along with other core markets despite mixed US and EU data. The market focus shifts to today's Jackson Hole symposium, with all eyes on Powell's speech later this evening.
• Australia's data calendar remains quiet. Things swing back into gear on Monday, with AU retail sales out for July (-0.1% expected versus +0.2% in June).