A$ Underperforms On Commodity/Equity Softness

The A$ remained an underperformer in the G10 space post the Asia close. The pair dipped back to 0.6386 before support emerged as broader USD sentiment softened. We got back to 0.6430/35 in late NY trade, before ending the session near 0.6415, which is where we currently track. This left the currency down 0.50% for the session, with only the CHF dipping by more in the G10 space.

• These moves keep us broadly within recent ranges for AUD/USD. Key short-term resistance has been defined at 0.6522, the Aug 30 and Sep 1 high, while on the downside, key support and the bear trigger is at 0.6365, the Aug 17 low.
• Cross asset signals worked against the AUD for Thursday. Global equity market slumped (SPX down 1.64%), while aggregate commodity indices weakened, down 1.10% for all commodities and 1.96% for metals. Iron ore is back to $117/ton, while copper fell over 2% to sub $370.
• Carry over from the Fed decision on Wednesday, coupled with resilient US jobless claims data, weighed on the commodity space/equities and aided back end US yields (10yr to 4.49%, +9bps).
• On the data front today, we the preliminary Judo Bank PMI prints. There are no consensus expectations.