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Aussie higher despite weaker commodities; RBA minutes due

The Australian dollar was higher overnight despite a clear weakening in commodity markets.

Major commodity prices were lower overnight with crude oil down 1.3% while copper was down 1.4%. Iron ore was down 1.0%.

However, the AUD’s strength has been driven by a weaker US dollar with markets selling the greenback after last week’s Federal Reserve meeting.

Brexit nears

Across markets, the AUD was mostly higher.

The AUDUSD was up 0.4% boosted by the weaker US dollar.

The AUD was also higher in Europe. The AUDEUR closed at two-week highs.

The AUDGBP was the best, up 0.7%, as the UK government announced the formal declaration of Brexit would take place next Wednesday.

RBA minutes

Looking to the upcoming events, RBA minutes will be closely watched.

New RBA governor Philip Lowe’s focus on housing and financial stability has been a key shift.

Also, any chatter about unemployment will be critical after last week’s poor jobs number.

Additionally, tonight’s focus will be on dairy prices. Fortnightly dairy prices are due at 12.00am. Overnight, we saw further weakness in agricultural markets, with sugar down 2.5%. A weaker number could see the AUDNZD climb higher.

By Steven Dooley -- Currency Strategist (APAC)

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