CBA: High Australian dollar "structural"

Amusing stuff from CBA today:

It would be surprising if AUD/USD fell below its December 2016 level of 0.7160 simply because there was a negative Australia-U.S. rate differential

Structural improvement in Australia’s current-account deficit (to 0.6% of GDP vs 4-5% of GDP in 2001 period)

Asian and global GDP growth remains firm, and Asia is running a current-account surplus (in 2001 the region had a large current-account deficit, and was recovering from 1997-98 Asian financial crisis)

Australia’s terms of trade is 62% higher than 2001

U.S. dollar is unlikely to see strength vs majors, unlike 2001 (absent delivery of US company tax cuts, USD is unlikely to appreciate much)

On point one:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

CBA: High Australian dollar “structural”