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The Pound's April rebound against the Australian Dollar has peaked for now with a potential second successive day of losses in prospect, driven by rising commodity prices.

Commodity price rises are supportive of the Australian Dollar given Australia is a net commodity and energy exporter, the opposite is true of the UK.

"AUD has continued to perform well... elevated commodity prices benefit Australia’s terms-or-trade," says Antti Ilvonen, Analyst, at Danske Bank.

Commodity prices have moved higher again this week with some analysts saying Russia's renewed offensive in the east of Ukraine is behind the moves.

"Russia has launched a new offensive in Donbas, eastern Ukraine, which has sparked demand for some safe haven assets, like gold which is at a 1-month high. Demand for commodities has also surged and thus currencies of commodity-exporting nation are back on the march with GBP/AUD and GBP/CAD down 0.5% this morning," says analyst George Vessey at Western Union Business Solutions.

The Pound to Australian Dollar exchange rate sunk to a multi-month low in early April, as a surge in commodity prices boosted the currencies of commodity supporters.

But the Australian Dollar rally eased from this point, allowing GBP/AUD to recover back to 1.7729 by April 18. (Set your FX rate alert here).

This week it has however edged lower to 1.7576 in tandem with another surge in the price of natural gas and oil.

Oil prices have spiked above $100 once more while various types of natural gas contracts also rose sharply.

"U.S. natural gas has surged to a 13-year high, briefly breaking above $8 for the first time since 2008. Oil prices remain elevated well above $100 a barrel, exacerbated by supplies worries in Libya," says Vessey.

Libya’s National Oil Corporation (NOC) said it was suspending production at a major oil field in the country’s south, declaring a "force majeure" due to a protest at the site.

The Al-Fil field is jointly managed by the NOC and Italian energy giant ENI and produces about 70,000 barrels of oil per day.

The market's reaction paints a picture of a very tight energy market that is highly vulnerable to any disruptions.

Of course this vulnerability largely stems from Russia's invasion of Ukraine and the resultant hit to energy production, transportation and sanctions.

Above: GBP/AUD (top) at daily intervals with AUD/USD (bottom).

While the majority of Russian oil and gas is not sanctioned various industries in the supply and distribution chain are.

"The EU’s latest decision to restrict imports of Russian coal and to ban Russian trucks and ships points to further supply hurdles ahead. There is renewed talk about banning Russian oil from Europe," says Dominic Schnider, a strategist at UBS.

UBS tells clients the commodity markets rally is not over yet and commodity prices are not high enough to cause sufficient demand destruction should the supply side tighten further.

For Australia, a net commodity exporter, this is supportive of its terms of trade.

"The persistent drop in Russian supply will continue to support prices of many Australian key export commodities, including coal and LNG. Iron ore outlook appears more mixed, as the risk of a Chinese lockdown-driven slowdown poses a downside risk in the near-term, but China will likely increase its stimulus measures to counteract the weakness towards H2," says Danske Bank's Ilvonen.

The Australian Dollar would likely benefit further if we are to see another round of commodity price rises, which would largely depend on how Russia's offensive in east Ukraine progresses.

Reports on Wednesday of further sanctions on Russia by the West could also help support commodity prices further as markets fear further disruptions to Russian supply lie ahead.

Ursula von der Leyen, the president of the European Commission, says world leaders have agreed to "tighten sanctions against Russia and step up financial and security assistance for Ukraine".

She was speaking after a call was convened by U.S. President Joe Biden to discuss the latest developments in Ukraine.

Biden spoke with French President Emmanuel Macron and British Prime Minister Boris Johnson, von der Leyen, German Chancellor Olaf Scholz and NATO Secretary-General Jens Stoltenberg, among others.

A major escalation in sanctions for financial markets would be a ban on Russian oil and gas by EU nations.

While a ban on gas looks remote, there remains talk of an oil ban; such speculation will ensure oil remains supported, in turn offering support to the Aussie Dollar.