I noticed an interesting trend in the currency markets — commodity currencies from the G10 are showing significant growth this year. The Australian dollar, Norwegian krone, and New Zealand dollar have become clear leaders, gaining approximately 6%, 5%, and 4% respectively.

What’s behind this? It’s simple — the market is overestimating its expectations for global interest rates. Major central banks are starting to change course: instead of cutting rates, they are focusing on fighting inflation. The Reserve Bank of Australia has already begun a tightening cycle, and the trimmed mean inflation rate has jumped to 3.4%. Everything points to a possible rate hike in May.

A similar situation is happening in Norway and New Zealand — inflation is rising, so rates will go up. This automatically pushes these countries’ currencies higher. Additionally, oil and copper prices are rising, further supporting economies rich in raw materials.

An especially interesting point: for the first time since 2017, interest rates in Australia have surpassed those in the United States. This attracts capital to places with strong fiscal positions and good access to raw materials. G10 currencies linked to commodities are clearly benefiting from this shift.

Although the Fed may still cut rates two or three times this year, some institutions suggest they might stay put. If that happens, we could enter a new “hawkish era,” which would seriously change the entire landscape of the currency markets.