AUD has retreated from fresh trend highs, with Commonwealth currencies including GBP, AUD, NZD and CAD extending recent trend highs in Asian trading today. Reports of central bank diversification into the GBP and AUD have emerged since last week and CAD is likely to benefit from such flows as well. AUD/USD traded to a high of 0.7887 early in Asia and the highest levels since October 2nd before pulling back to 0.7842, weighed down by the retreat in the EUR. The commodity outlook remains a key factor underpinning the AUD with the CRB index rising above 245 today and the highest level since November. It should be noted that AUD was trading much lower, under 0.6600, when the CRB was last at these levels. The outlook for commodities still remains clouded. Though Rio Tinto cited strong demand from China yesterday, BHP today voiced doubts about the current global commodity rally, stating that China’s buying is not real demand. Oil analysts are blaming oil price gains too on China stockpiling. For AUD, good buying interest remains toward 0.7750 but selling interest is eyed from 0.7900 toward 0.8000 with concerns that the AUD performance may be overdone particularly, as BHP points out, the commodity prices still remain 50% off their peak.