SINGAPORE — The Australian dollar has leaped to its highest in more than two years, helped by surging iron ore prices.

Late last week, it surged past 0.75 against the dollar, a high not seen since 2018. The Australian currency had already been shooting higher, rocketing nearly 8% against the dollar since the beginning of this year.

“The AUD continues to leap, trading above 0.7570 during Asia on Friday, helped along by the rise in commodity prices over the past week and the surge in the iron ore price due to a number of factors including weather in Port Hedland,” said Tapas Strickland, director of economics and markets at National Australia Bank. Port Hedland is a town in Western Australia.

Analysts said iron ore prices have climbed as demand from China rises, and have been further buoyed by dwindling supply and disruptions caused by storms hitting Australia, the world’s largest producer.

Iron ore futures on China’s Dalian Commodity Exchange surged by almost 10% on Friday to an all-time high, crossing the 1,000 yuan ($152.95) per ton mark for the first time in history.

Hayden Dimes of ANZ Research on Monday attributed the higher prices to strong demand from China. Australia accounted for about 60% of the world’s total seaborne shipments in 2019, according to the World Steel Association.

“There is no doubt that Chinese demand has been stronger than expected amid fiscal stimulus measures. However, the threat of further supply disruptions is accelerating this,” he said.

China’s economy has largely recovered from the worst of the coronavirus hit, fueled in part by funneling stimulus into infrastructure. That has led to a surge in demand for iron ore, a steel-making ingredient.

China buys much of Australia’s iron ore, which has been spared in a year of deteriorating relations that pummeled many of Australia’s exports to the Asian country.

“Elevated iron ore prices are … helping AUD to ignore bad news, including a further deterioration in Australia‑China government relations,” added the Commonwealth Bank of Australia (CBA) in a note on Monday. Commodity prices are a major driver of the fair value of the Australian dollar, it added.

Many of Australia’s exports — including wine, barley, and cotton — have been caught up in the country’s geopolitical tensions with China, its largest trading partner. Bilateral relations between Canberra and Beijing soured earlier this year after Australia supported a growing call for an international inquiry into China’s handling of the coronavirus pandemic.

Iron ore, though, has been spared in the growing dispute – which the CBA attributed to the very few alternatives that China has.

“With China accounting for 80‑85% of Australia’s iron ore exports, the unseasonal fall in Australia’s iron ore exports have raised concerns that China may be restricting imports from Australia,” said Vivek Dhar, director of mining and energy commodities research at the bank.

Compared to the previous four weeks, Australia’s iron ore exports have decreased around 6.1% in the week ending Dec. 4 – which Dhar said was “unusual” for this time of year.

“And while those concerns may be justified given Australia’s coal and copper concentrate exports to China have faced unofficial restrictions already this year, we think it’s too premature to make a similar call for iron ore,” he said.

— CNBC’s Elliot Smith and Saheli Roy Choudhury contributed to this report.