After the Australian dollar breaks new highs, is there still room to rise? Rate hikes and commodity market trends are driving the strongest performance since 2023.

The Australian dollar has recently performed remarkably well, with market trading activity continuing to heat up. On February 9, the AUD/USD exchange rate reached 0.7098, hitting a new high since February 2023; at the same time, the AUD/JPY surged to 110.79, setting a new historical high since 1990. In just a few weeks since 2026, the AUD/USD has gained a total of 6%, and the AUD/JPY has increased by 5%, indicating a clear rebound in market confidence in the currency of this major commodity-exporting country.

AUD Hits New Highs, Driven by Rate Hikes and Commodity Boom

The continued strength of the Australian dollar is driven by two main factors. The most critical is the Reserve Bank of Australia’s (RBA) decision to raise interest rates—on February 3, the RBA announced a 25 basis point hike, becoming the second major central bank after the Bank of Japan to begin a rate hike cycle. This policy shift immediately prompted the market to reassess the attractiveness of AUD investments, leading to capital inflows into Australian assets. Analysts believe that, due to persistently high domestic inflation and a resilient labor market, the RBA may further raise rates within the year, with a 74% probability of a rate hike in May.

Meanwhile, the global surge in commodity prices provides another strong support for the AUD. As a major global exporter of commodities, Australia benefits directly from the strong performance of strategic resources such as gold, silver, and copper. Rising commodity prices → increased export revenues → higher demand for the AUD. This positive economic cycle further enhances the currency’s market appeal.

Rate Hikes + Export Opportunities Boost Confidence in the AUD

The rate hikes not only boost the exchange rate but also reinforce the fundamentals of the Australian economy. The rate increase signals the RBA’s determination to control inflation and reflects the resilience of the country’s labor market. Investor confidence in Australia’s economic outlook strengthens, leading to increased holdings of AUD assets for higher interest returns, creating a positive feedback loop.

The boom in commodity exports provides deeper fundamental support for the AUD. When global demand for gold, silver, copper, and other commodities remains strong, Australia’s export-oriented economy continues to benefit. Increased foreign exchange income will also support the AUD’s appreciation expectations.

Outlook: Can the AUD Still Rise 6%? Analysts’ Optimism and Risks

Market analysts are quite optimistic about the AUD’s future trajectory. Imre Speizer, a strategist at Westpac Banking Corporation, stated, “The AUD/USD is expected to form a new trading range between 0.68 and 0.72, with further upside potential—supported by strong fundamentals, a breakthrough above 0.75 within six months is possible.” This suggests that the AUD has room to appreciate further from its current level of 0.7098.

However, the outlook is not without risks. A significant correction in commodity prices could remove a key driver of AUD appreciation, potentially leading to a pullback. Additionally, if international geopolitical tensions worsen, the high-yield but risk-sensitive AUD could be vulnerable to capital outflows. Therefore, monitoring global commodity markets and geopolitical risks remains a crucial task for AUD investors.