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GBP/AUD spot at publication: 1.7846Bank transfer rates (indicative guide): 1.7220-1.7346FX transfer specialist rates (indicative): 1.7380-1.7700More information on securing specialist rates, hereThe Australian Dollar leapt by nearly a percent against the U.S. Dollar ahead of the weekend thanks to a combination of rising Australian government bond yields and surging commodity prices, two prime drivers of Aussie Dollar demand.

The Australian Dollar-to-U.S. Dollar exchange rate recorded a high at 1.7843, levels last seen on March 14, 2018, meanwhile the Pound-to-Australian Dollar exchange rate pulled back to 1.7855 thanks to a daily decline of two-thirds of a percent.

"AUD/USD is up to new cyclical highs above 0.7800 on higher Australian government bond yields and encouraging Australian economic activity," says Elias Haddad, Senior Currency Strategist at CBA.

Data out of Australia was encouraging with the Markit Composite PMI for February suggesting the economy continue to grow. Both Manufacturing PMI (56.6) and Services PMI (54.1) read at levels consistent with strong expansion.

The data comes a day after Australia reported a decline in the unemployment rate to 6.4% in January from 6.5% in December.

"Looking ahead, the large amount of pent‑up savings, rising dwelling prices and a strong labour market suggest consumer spending will be a key driver of solid economic growth over 2021," says Haddad.

Commodity markets remain supportive too, with the price of bulk iron ore rising sharply on Thursday, with the gains being held on Friday, in the wake of the reopening of Chinese markets following the New Year break.

"AUD/USD spot reclaims 0.7800 as industrial metals rise for a 12th straight day," says Kenneth Broux, a strategist with Société Générale.

The commodity complex is in bullish shape with Copper, nickel, Zinc and aluminium all rising strongly.

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Given Australia's status as one of the world's premier exporters of industrial commodities, strong price dynamics will boost the country's foreign exchange earnings, thereby underpinning the value of the Aussie Dollar.

"Copper and nickel prices continued to rally on Friday, powering to multi-year highs along with tin as the world looks to build its way out of a Covid-fueled recession," says John Meyer, an analyst at SP Angel. "Investors are starting to appreciate that there is insufficient mine capacity to enable rapid transition to a more environmentally-conscious global economy."

Should commodity market dynamics remain constructive, the Australian Dollar is likely to remain on the front foot unless a significant shift in foreign exchange market dynamics breaks this linkage.

"Before vaccines triggered a wave of optimism, the currencies exposed most to Asia started benefiting from an earlier recovery there than in the rest of the world. We still expect the AUD and NZD to perform, but likely at a slower pace than last year," says Kit Juckes, a foreign exchange strategist at RBA.

Juckes says one potential headwind that might blow into the Aussie Dollar's strong performance is the U.S. Federal Reserve that could start hinting at some point in 2021 that it will gradually exit from the current extremely accommodative conditions.

This would in turn push up the yields paid on U.S. bonds while pushing up borrowing rates in general.

In short, financing conditions across the world would likely tighten, potentially putting a lid on the AUD-supportive rally in commodity prices.