Why the Aussie’s 35‑Year Surge Could Be Your Next Portfolio Catalyst

Key Takeaways

• The Australian dollar (AUD) hit a 35‑year high against the yen and a 13‑year high against the euro, driven by strong inflation data and a hawkish RBA.
• Risk‑on sentiment is reviving as AI startup Anthropic signals partnership‑first strategies, easing fears of disruptive AI shocks.
• President Trump’s proposed uniform 15% global tariff may lift Asia‑Pacific exporters, reinforcing commodity‑currency gains.
• Technical charts show resistance near 111.00/JPY and 0.72/USD; breaking these levels could fuel further upside.
• Bull case: Continued RBA tightening, AI‑friendly risk appetite, and tariff‑driven export growth. Bear case: Re‑emergence of AI‑related regulatory risk or a sudden shift to risk‑off amid geopolitical spikes.

Most investors ignored the silent AI calm. That was a mistake.

While headlines screamed “AI disruption,” a quiet partnership wave from Anthropic’s Claude chatbot is actually powering a fresh risk‑on rally. Commodity‑linked currencies—Australia’s AUD, New Zealand’s NZD, and Canada’s CAD—are riding that wave, and the numbers are impossible to ignore.

Why the Aussie’s 35‑Year High Is More Than a Currency Tale

January’s consumer‑price index (CPI) showed Australia’s inflation at a seasonally‑adjusted 3.8% year‑on‑year, unchanged from December after an upward revision from 3.6%. The trimmed‑mean measure—a gauge that strips out volatile items—crept to 3.4%, nudging the Reserve Bank of Australia (RBA) toward a more hawkish posture. A hawkish stance typically means higher interest rates, which attract foreign capital and lift the domestic currency.

In parallel, construction activity, a leading leading‑indicator for domestic demand, slipped 0.1% quarter‑on‑quarter to A$80.011 billion, missing consensus expectations. The modest dip is being absorbed by a 3% annual rise, indicating that the sector’s long‑term trend remains positive despite a short‑term wobble.

These fundamentals give the AUD a solid foundation beyond short‑term speculation, reinforcing the 35‑year high of 110.84 ¥ and the 1‑year high of 1.6688 €.

AI‑Related Risk‑On Sentiment: How Anthropic’s Play Is Re‑shaping FX

Risk‑on describes a market environment where investors favor higher‑yielding, growth‑oriented assets, shedding safe‑haven positions like the yen or the Swiss franc. Earlier concerns that generative AI would trigger a wave of layoffs and regulatory clamp‑downs have softened after Anthropic announced its Claude chatbot will integrate with existing businesses rather than replace them. This partnership‑first narrative reduces perceived systemic risk, encouraging investors to chase higher‑return assets—including commodity currencies that historically benefit from risk‑on waves.

Technically, the AUD’s ascent mirrors the tech‑heavy Nasdaq’s bounce, confirming a cross‑asset correlation that traders are now exploiting.

Tariff Talk: Trump’s 15% Global Tariff and Its Ripple Through Commodity Currencies

A uniform 15% tariff on imports, floated by President Trump, would level the playing field for Asia‑Pacific exporters that have been hit with steeper duties in the past. By capping tariffs, export‑driven economies like Australia, New Zealand, and Canada could see margin improvements, bolstering their currencies.

Historically, tariff reductions have lifted commodity‑linked currencies by 0.5‑1% on average within weeks, as trade‑dependent economies anticipate higher earnings. If the tariff policy materialises, expect the AUD, NZD, and CAD to retain their upward bias.

Construction Activity and Aussie Growth: The Real Economic Underpinning

Construction output slipped marginally in Q4 2025, but the year‑over‑year rise of 3% shows resilience. The sector’s health matters because it feeds directly into demand for raw materials—iron ore, copper, and coal—where Australia is a global supplier. Strong commodity prices, coupled with modest construction growth, create a virtuous cycle that supports the AUD.

Investors should monitor the Australian Bureau of Statistics’ upcoming construction‑work forecasts for Q1 2026; any upward revision could act as a catalyst for another currency rally.

Technical Outlook: Resistance Zones and What They Mean for Your Portfolio

On the chart, the AUD faces resistance at 111.00 ¥ and 0.72 USD. A clean break above these levels could unlock a test of 1.75 USD and 112 ¥, expanding the upside corridor. Conversely, a fall back below 0.70 USD would expose the pair to a 0.68 USD support zone, potentially triggering a short‑term correction.

For the NZD, the next hurdle sits near 0.61 USD and 1.95 €; breaching these could signal a multi‑month rally. The CAD’s resistance lies around 1.35 USD and 114 ¥; a decisive move above would reinforce the risk‑on narrative.

Definitions:

• Risk‑on: Market sentiment favouring higher‑yielding assets, typically equities and commodity currencies.
• Trimmed mean inflation: An inflation measure that excludes the most volatile price changes, providing a clearer view of underlying price pressure.
• Resistance: A price level where selling pressure historically outweighs buying pressure, often acting as a ceiling.

Investor Playbook: Bull vs. Bear Cases for Commodity Currencies

Bull Case

• RBA maintains a hawkish stance, pushing rates higher.
• AI partnership narrative sustains risk‑on sentiment across equity and FX markets.
• Uniform 15% tariff lifts export margins for Australia, New Zealand, and Canada.
• Commodity prices stay robust, underpinning trade‑linked currencies.

Bear Case

• Emergence of AI‑related regulatory scrutiny triggers a market risk‑off shift.
• Geopolitical flare‑up in the Middle East escalates safe‑haven demand for yen and franc.
• RBA pauses rate hikes, prompting a carry‑trade unwind.
• Unexpected slowdown in construction or commodity demand drags export earnings.

Strategically, position size should reflect the prevailing sentiment: allocate a modest 5‑7% of portfolio equity to long AUD/NZD/CAD positions in a bull environment, while keeping protective stops just below identified support levels. In a bear scenario, consider short‑term hedges via options or currency‑linked ETFs to mitigate downside.

Stay vigilant for the upcoming data releases—Germany’s revised Q4 GDP, Euro‑area inflation, and U.S. mortgage approvals—as they can swiftly tip sentiment and either reinforce or reverse the current trajectory.