According to Zhitong Finance APP, the Australian dollar has become an unexpected safe-haven asset, thanks to high oil and gas prices, as well as the market increasingly anticipating that the Reserve Bank of Australia may raise interest rates as early as next week. The Australian dollar rose to its highest level since June 2022 on Tuesday, at 71.68 cents, and the exchange rate against the yen also reached a new high in 35 years, making it the best-performing major currency this year. Citigroup stated that although the Australian dollar is usually sensitive to the US dollar and overall risk sentiment, this round of gains may extend to 75 cents within three months.

As traders and economists generally expect the Reserve Bank of Australia to raise interest rates to curb inflation, the Australian dollar may still be able to relatively withstand the impact of overall market volatility. Additionally, if oil and gas prices remain high, Australia's position as a major energy exporter may continue to support the Australian dollar.

Nick Twidale, Chief Market Analyst at AT Global Markets in Sydney, stated, "In the current environment, the Australian dollar is more advantageous than other currencies. However, this is contrary to the trend we usually see for the Australian dollar during times of geopolitical tension, where it typically weakens in most aspects, especially against the yen."

Hawkish officials from the Reserve Bank of Australia have indicated that they will not hesitate to raise policy rates if the conflict in Iran further exacerbates inflationary pressures, which also supports the exchange rate of the Australian dollar.

Swap trading shows that the likelihood of policymakers raising interest rates on March 17 exceeds 70%, which helps Australian bonds maintain one of the highest yields among developed countries. Interest rate expectations pushed the Australia-US benchmark government bond spread to its highest level since October 2022 on Tuesday, further supporting the exchange rate of the Australian dollar.

Meanwhile, data shows that the options market earlier on Wednesday estimated that the currency has a nearly 33% chance of reaching 75 cents within three months.

Citigroup strategists, including Dirk Willer, wrote in a report to clients, "Assuming oil prices have peaked but remain high, coupled with the hawkish stance of the Reserve Bank of Australia, we believe market momentum may quickly build again. Even during the most pressured periods related to Iran, the Australian dollar has seen little selling, given the improvement in trade conditions and the positive impact of the Reserve Bank of Australia's hawkish stance."