The Australian dollar exchange traded fund (ETF) is running on a bullish uptrend, which isn’t surprising given the fundamentals are backing the Aussie dollar.

Australia’s currency has benefited from the rising costs of commodities. More recently, as currency traders are becoming more comfortable with the Japanese yen’s current ceiling, traders are borrowing more of the low-yielding yen and converting it to the Australian dollar.

Kurt Magnus, executive director of FX Sales at Nomura in Sydney, commented that “the yen is being sold in the search of yield because equity markets are stable.” [Currency ETFs and the Carry Trade.]

Australia’s benchmark interest rate currently stands at 4.75%, which makes the Australian dollar much more attractive compared to other developed countries’ currencies since their rates are hovering around record lows.

Currency ETF traders may play the Australian dollar through the CurrencyShares Australian Dollar Trust (NYSEArca: FXA), which is up 3.3% in the last month. FXA tries to reflect the price of the Australian dollar. The ETF has an expense ratio of 0.40% and is currently trading above its 50-day and 200-day moving averages.