The soaring CRB RIND commodity index,up 2.3% this year, is an indication that there is still some real demand in commodity markets.
However for FX watchers of AUD and NZD, it has been the USD side driving these pairs through key technical levels.
AUDUSD broke out of the top end of a channel at 0.74 on Wednesday, providing further short-term support.
NZDUSD is now approaching its 100DMA at 0.7147, which if broken could open the way towards 0.7400.
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Dairy prices are unchanged in the past week, further supporting the view that USD is driving the pair.
We still see the NZD outperforming the AUD over the medium term but as the USD correction continues and metals prices rally, we have decided to close our short AUDNZD position* and will wait for better entry points.