CANBERRA: The Australian dollar hit a new 2017 high overnight, as the greenback sagged after US Treasury Secretary Steve Mnuchin made it clear any structural reforms by the Trump administration will take time to boost the economy.
The Aussie rose as far as US77.41¢ overnight, its highest level since the immediate aftermath of the US elections in November, before consolidating around US77.15¢ on Friday morning. The new high extends a strong rise since the beginning of the year – the Aussie has soared against most major currencies, leading some to suspect investors are stocking up on the currency to gain exposure to forecast strong growth in Asia. Mr Mnuchin flagged “very significant” tax reform focusing on middle-income tax cuts, simplification and lower company taxes, and added the Trump administration was still studying a proposed border tax on imports. “We want to get this done by the August recess,” he told CNBC, acknowledging in another interview that such a timeline was “very aggressive”. But he also noted that any boost to GDP growth from the new administration’s policies, which have yet to be detailed, would be a long-term story, saying tax reform wouldn’t boost economic growth to 3 per cent before late 2018.
