Commodity currencies AUD and NZD have risen to the highest levels in over two years, buoyed by an improvement in market sentiment due to vaccine optimism even as prices of commodities like iron ore and crude oil strengthened. Both AUD/USD and NZD/USD are on track to post gains for the sixth straight week.

So far this year, AUD/USD has strengthened by around 7.8% and has touched the highest level seen since June 2018. The bullish moves were driven by a surge in iron ore prices – Australia’s most important export, which rose by 4.3% in the previous session alone.

Meanwhile, NZD/USD has gained around 0.9% so far this week and has strengthened by around 5.6% through 2020 despite the coronavirus pandemic. The NZD made gains against other major currencies after New Zealand successfully contained the pandemic sooner than most leading economies worldwide.

The recent risk-on sentiment in global markets has also bolstered investor confidence in trading commodity currencies instead of opting for safe havens. The market sentiment received a boost after multiple pharmaceutical companies announced the development of effective vaccines to combat COVID-19, and countries like Britain and Canada approved the rollout of vaccines.