AUD/USD Back To 0.6500, Outperforms Most Other G10, Higher Metal Prices Help

AUD/USD sits near 0.6500 in early Friday Asia Pac trade, little changed from end Wednesday levels in NY. Post the Asia close on Thursday we got to highs just above 0.6530 but saw no follow through. Support was evident on dips sub 0.6490. Month end flows and mixed US data were the main drivers of AUD volatility through US trade.

• At this stage, AUD/USD is still tracking lower for the week, off by around 1% if current levels hold. This fits with marginally higher USD index levels, while yield differentials with the US generally tracked lower in Feb, but sit up from recent lows.
• US yields ended Thursday trade down a touch. Equity sentiment was generally better but this didn't much to support the A$. We ended up firmer against the CHF, but down against the yen (post yesterday's hawkish BoJ speech). The A$ outperformed the rest of the G10.
• In the commodity space, Bloomberg commodity indices were mixed, flat for the aggregate, but higher for metals. Iron ore is back to $118/ton, against recent lows sub $114/ton.
• The data calendar has the final Feb manufacturing PMI on tap today. House price data for Feb showed prices up 0.6% m/m and 10% in y/y terms.
• In the option expiry space, we have 0.6510 (490mln) for NY cut later today.