SYDNEY: The Australian and New Zealand dollars were consolidating sizable gains on Wednesday, as signs of strength in global manufacturing and broad weakness in the US dollar underpinned commodity prices.

The Aussie was taking a breather at $0.7743, having climbed 1.2% overnight to a 2-1/2 year top of $0.7777.

The next targets were a series of tops from early 2018 at $0.7813, $0.7916 and $0.7988, followed by a major peak at $0.8136 which had been the highest since mid-2015.

The kiwi dollar reached a fresh peak at $0.7261, again a level not seen since April 2018.

Bulls are now eyeing highs from early 2018 at $0.7395 and $0.7437.

A range of surveys overnight showed manufacturing globally had proved resilient in December despite escalating virus cases, with the US ISM measure notably strong.

"Industrial production has been accelerating across the region's biggest manufacturers and we expect further gains in the months ahead," said analysts at TD Securities in a note.

"Firm import orders will likely help drive Asian exports and in turn manufacturing output."

That pointed to solid demand for commodities, which were given an added boost by a 5% jump in oil prices after Saudi Arabia's decision to curb crude output.

Also helping was a steady rise in the Chinese yuan, which made resources more affordable for importers there. The Aussie is used by international investors as a liquid proxy for the yuan and often tracks its moves.

At the same time, the US dollar has been under pressure as the country's budget and trade deficits expand rapidly, requiring ever-more borrowing from abroad.

Should Tuesday's elections in Georgia give Democrats control of the Senate, that could lead to a lot more stimulus spending and borrowing and a further drag on the US dollar.

That risk pushed US 10-year yields to their highest since March, and pulled Australian yields 6 basis points higher to 1.01%.

The 10-year futures contract dropped 6 ticks to 98.9450 and back toward its December low at 98.9200.