A$ To Fresh Multi Month Highs, Amid Broad USD Weakness

The A$ finished the Thursday session the second best performer within the G10 space. The pair currently tracks in the 0.6880/85 region, having gained ~1.3%. This is a touch below session highs from late in NY in the 0.6890/95 area. The USD suffered broad base losses, as the EUR gained post the ECB hike.

• The A$ has cleared key resistance at 0.6818, the May 10 high. This reinforces bullish conditions and paves the way for a climb towards 0.6921 next, the Feb 20 high. Further out, scope is seen for gains to 0.6993, a Fibonacci retracement. Initial support lies at 0.6768, the Jun 15 low.
• Thursday cross asset signals were A$ supportive, as US yields pulled back (-4.5-8.0bps lower across the curve), firmer initial jobless claims weighing. The AU-US 2yr government yield spread is closing in early Q3 highs from last year (aided by yesterday's strong labour market report).
• US equities rallied further to fresh highs back to Apr 2022, with AUD/JPY back above 96.50, highs back to Sep last year.
• Commodity indices were also higher, +2.2% for the Bloomberg aggregate index, +0.39% for base metals. Iron ore sits a touch off recent highs, last near $112/ton. Stimulus talks persist in China, local equities rallying post the lunch time break yesterday, which likely aided the A$ at the margins.
• The local data calendar is empty today.