Australian dollar hits monthly highs on surging commodities prices

Following the improved risk sentiment and the appetite for commodities-linked currencies, the Australian dollar gained momentum climbing to near the 0,75 level against the U.S. dollar, its highest since November 2021, benefiting from soaring prices for Australia's commodity exports such as energies, industrial metals, and grains.

The risk-sensitive Aussie posts an impressive run towards multi-month highs against major currencies, managing to recover the Russian invasion-linked losses on previews weeks due to the risk aversion mood from the traders.

The antipodean currency is getting strong support from the rally in the commodities complex after the Russian invasion of Ukraine coupled with the broadly softer U.S. dollar, currently trading to near 0.75 key resistance level, well off weekly lows of 0,715, and yearly lows of 0,69 hit on January 28, 2022.

AUD/JPY jumps to 7-year highs:

Yet, it was with the Japanese Yen that Aussie posted the most gains of 6% to ¥90 level in this week so far, that would make it 8 winning weeks in a row, after notching a 2022-low of ¥80 on January 28.

AUD/JPY pair, Daily chart

Aussie hit its highest level since December 2015 to the safe-haven Yen, having gained 8% in March so far, getting support from the ongoing Bank of Japan’s dovish stance, at a moment Bank of Australia was reversing its tightening monetary program to curb surging inflation.

Hence, elevated commodity prices are a negative catalyst for the Yen as well, since Japan imports most of its raw material needs mainly from commodities-rich Australia, widening the country’s trade deficit and boosting AUD/JPY pair.