"The resilient Australian dollar - how long will it last?"

A piece from AMP Capital, a huge Australian fund manager. From Diana Mousina, Economist. Article titled:

The resilient Australian dollar - how long will it last?

Key points from the article:

• Despite the current strength in the Australian dollar ($A), we still see the $A heading lower during the coming year because recent commodity price gains are unlikely to be sustained at the same pace, the US dollar is expected to continue rising and there is still the risk that the Reserve Bank of Australia (RBA) cuts the cash rate again.
• The RBA wants a lower currency to assist non-mining growth. A high exchange rate reduces GDP growth during the medium term but the impact across industries is quite varied.
• The most direct impact of currency changes are on industry exports. The RBA estimates that the most significant negative impacts of an appreciation in the currency affect mining, manufacturing and other business services.
• Business surveys suggest that Australian firms are now better placed to deal with a higher $A than a few years ago perhaps from all the years of dealing with a strong currency.
• A lower $A will be helpful in further assisting a recovery in non-mining business investment. But, if businesses are now better able to deal with a higher $A, then perhaps a smaller-than-expected currency depreciation would still generate the necessary positive growth impulse the RBA wants to see.