This is because higher commodity prices leads to an increase in the of commodity exports as any given of commodities exported onto global markets receives a higher . This means that more Australian dollars are required by foreign buyers to complete the transaction (or commodity exporters will be seeking to convert more foreign currency into Australian dollars). Either way, it leads to an increase in the demand for Australian dollars on foreign currency markets, causing the price of Australia's currency to rise (i.e. an of the AUD occurs).