In this paper, an AC current sensing system is established, using optical fiber Bragg grating (FBG) as the sensing probe which is modulated by Giant Magnetostrictive bar. The experiment research on power current signal is carried out by using Coarse Wavelength Division Multiplexer (CWDM) quasi-linear sideband demodulation technology. The results show that the amplitude, frequency and phase information of signal could be well detected in this system. The current waveform of the signal can be accurately reconstructed in real-time by fitting the loop characteristic system transfer function with higher order equations.