The war in the Middle East spiked oil and gas prices, the latter being something Australia is a net exporter of.

But on the oil front, Australia is as vulnerable as many other global economies that don't have oil basins to tap into.

Juckes explains the Australian dollar has been resilient in the face of rising oil prices; the country imports roughly 83% of the crude oil it refines and gets 50% of its refined petrol from Singapore alone.

"Hence, despite being a major exporter of natural resources, including natural gas, the economy is vulnerable to a protracted spike in oil prices," says Juckes.

Christ Turner, head of FX analysis at ING, says the Aussie dollar is "outperforming again and has delivered a very resilient performance as a high-beta currency."

A high-beta currency is one that tends to react to the fortunes of global economic sentiment, usually falling when stocks are under pressure. AUD resilience ultimately defies the recent stresses in the market that followed fears that rising oil would deliver an inflationary shock to energy importers.

To be sure, global bonds sold off and their yields spiked in response to the conflict, suggesting investors see central banks reacting to events by raising interest rates: higher interest rates cool inflation.

According to Bob Savage, Head of Markets Macro Strategy at Bank of New York, "the RBA will remain the most hawkish G10 central bank, which was the case even before the conflict."

Above: The GBP/AUD fell sharply into the outbreak of the war in the Middle East. It has since stabilised and consolidated.

He cites the response of a major player in the RBA, Andrew Hauser, who acts as Deputy Governor, to the war in the Middle East.

Hauser said Australian inflation is rising beyond February's projections, partly due to potential price pressures from the Iran conflict, which is complicating policy decisions.

"He emphasised the importance of taking necessary steps to bring inflation back to the 2-3% target," says Savage.

The RBA has already raised interest rates this year, putting it on a 'hawkish' policy path that means Australia commands the highest yield of its developed market peers.

That superiority has fed an impressive Aussie dollar rally against the dollar, euro, pound and most G10 peers.

Hauser's message is that markets can expect more of this AUD-supportive policy-making in order to get ahead of inflation.

Soc Gen's Juckes says Australian dollar resilience is largely down to relative rates, which "are still moving firmly in the AUD's favour."

He sees Australia's interest rate advantage over the U.S. as being more supportive today than when AUD/USD traded at 0.76 in 2022. (The exchange rate is at 0.7112 today.)

"Let's see whether AUD/USD can push through the highs of the year at 0.7150," says ING's Turner, who notes that the currency has also received support from China, where February trade data, where imports surprised on the upside.

"We think it can reach higher levels in the coming months," says Juckes of AUD.