For a second session, commodity currencies....>

FOREX: For a second session, commodity currencies rally at the USD's expense

-AUD, NZD and CAD are all stronger as energy, industrial and precious metals

prices continue to climb. The risk supportive environment (through higher

equities) as well as reports that Saudi Arabia are unofficially targeting an

$80/bbl oil price has helped AUD/USD re-target the 200-dma at $0.7813. The move

filtered through to USD/CAD which has now dropped 1.5% in just 2 sessions.

-A speech from China President Xi Jinping supported risk appetite from the off

as markets read a conciliatory tone on trade tariffs. This was underpinned by a

somewhat friendlier tone toward China from Trump, helping USD/JPY comfortably

climb through yesterday's highs.

-EUR/USD saw an early bid toward $1.2380 as ECB's Nowotny talked up the prospect

of a deposit rate hike as the first step of any tightening sequence, thereby

narrowing the rate corridor. The bidtone was erased as it was clarified his

views aren't representative. Draghi may be questioned on this tomorrow.

-UK production numbers, US CPI and the FOMC minutes take focus tomorrow, and a

speech from RBA governor Lowe overnight also due.