The Capes Current is a northward-flowing coastal current driven by upwelling-favourable winds during the austral summer, inshore of the poleward-flowing Leeuwin Current which dominates the circulation on the outer shelf and shelf break, off the southwest coast of Australia. In this study, we use shelf-mooring observations under the Integrated Marine Observing System (IMOS) to investigate the structure and variability of the Capes Current, and their associations with wind-driven upwelling, geostrophic currents, and marine heatwaves and cold spells that have occurred along the coast over the past 12 years. Results show that the Capes Current is stronger during El Niño events and weaker during La Niña events, which is opposite to the variability of the Leeuwin Current. Stronger Capes Current is often associated with marine cold spells and stronger coastal upwelling, which is highly beneficial for finfish recruitment off the coast. The stronger Capes Current and marine cold spells in recent years have helped the recovery of benthic species of local fisheries that were significantly affected by the damaging heat stress during the 2011-2013 marine heatwave period.