The chief economist at Danish global banking giant Saxo is maintaining his prediction the Australian dollar will return to parity with the greenback, possibly within a year.

Steen Jakobsen is renowned internationally for his unconventional forecasts.

He was one of the few financial analysts who tipped the Brexit vote getting up.

Among his latest predictions are that Donald Trump is a good chance to get into the White House, that this will halt further US rate rises and that Australian interest rates are near their lowest point.

Mr Jakobsen told ABC's The Business that Australians should expect interest rates to rise by a percentage point, even if they fall once more next month, and that this will drive the currency back to parity, possibly within 12 months.

Sorry, this video has expired Interview with Steen Jacobsen ( Ticky Fullerton )

TICKY FULLERTON: Let me ask you about the Australian dollar first, because parity with the US dollar: that's quite a big call. You made that call in March. A few things have happened since then. Are you still comfortable with that?

STEEN JAKOBSEN: I'm very comfortable. But of course, the word you left out is: "when" it's going to go to one.

But what I said is against what is the consensus view in Australia, you just trust on the inflation report.

I think people have to make themselves aware of the fact that the next 100 basis point move from the RBA will be on the upside.

It will not be an additional 100 bases on the downside, meaning that the interest rate cycle in Australia is flattening out.

We may see one more lowering of the rates, but that will be the low point. So that is the Australian side.

The US dollar side: we're getting a Trump, potentially, into the White House; we are seeing trade sanctioning across the board; we are seeing people going anti-globalisation. That is not good for the US dollar at all.

TICKY FULLERTON: So the earliest you could get to parity if those events happen would be: what? Within a couple of...

STEEN JAKOBSEN: When I come back to see you in 12 months from now, we could be at one in the absolute extreme case.

But I think what you have to remember is that Australia not only represents your daily life, but it is a quasi-China story.

It is a story where you have commodities trading at cyclical lows. You're trading at interest rate lows.

So, I think if you want to look to the world - if you want to look at the three to five years down the line - I think the Australian dollar is a safe haven because you are, in GDP per capita a very, very strong economy.

I think you are doing a lot of things wrong on the economic side, let me be honest. But I think the uptake from China coming online again is very, very potential. And the China story is totally misunderstood in the rest of the world.

TICKY FULLERTON: All right. Well, you mentioned the US being the other side of the coin, of course. Now, we've got the FOMC (Federal Open Market Committee) meeting this week. What do you think is going to happen with the Federal Reserve, Janet Yellen and these jolly old rates?

STEEN JAKOBSEN: They're going to do absolutely nothing, as they normally do.

They started the year by threatening, even promising, guaranteeing, us they were going to hike interest rates four to five times. They've done zero.

TICKY FULLERTON: So they won't upset the market? Janet Yellen won't upset the market, wrong-foot the market?

STEEN JAKOBSEN: They can't.

But there's even a practical reason why they can't do it: because the yield curve - so the difference between the very short money and the very long money, the money that you deposit at zero, which the banks want to lend out at 20 and 30 years - is trading at its all-time low, almost. It's running at 80 basis points.

So basically, whether you lend out money at zero months or in 30 years, it's almost the same. That is a huge tax on the banking sector. You see that in Australia. You see that in the US.

So there is actually, beyond the economic reasons, beyond the political reasons, there is also a practical reason.

If you keep heightening the interest rate, then you will have a tax on the financial system. Not happening.

TICKY FULLERTON: You mentioned China there. Of course, we've got the G20 going on - finance ministers - going on at the moment in China. There's been a bit of criticism there about the stealth devaluation of the yuan this year.

Do you think there is a lot of currency war play going on at the moment?

STEEN JAKOBSEN: Absolutely, and you have been part of it indirectly yourself in Australia, through having the weaker Aussie compensating for some of the lack of terms of trade.

But the fact is that the G7, the G20, all of the leaders today are agreeing that pursuing a policy of devaluing your own currency is not allowed any more.

So China is allowed because it is in a unique situation, they have taken all of the rise of the currency relatively to their competitors.

So I think China will be allowed to have a gradual 3 to 5 per cent devaluation over every six months.

And that leads to more deflationary forces that keep interest rates in place.

But what we have to look at in terms of China is the fact that the productivity in China is only 20 per cent of what it is in the US.

So China can surprise to the upside, but only through opening a market and internationalisation of the renminbi - which is the other side of your question.

'Trump will be good', the 'alternative of doing nothing'

TICKY FULLERTON: Steen, you correctly called Brexit, so you were one of few people there. But you also talk about it now as it could be a catalyst for positive change. In what way?

Because in the next 12 months we've got various European elections; we've got another referendum in Italy: lots of opportunity for things to go rather wobbly?

STEEN JAKOBSEN: Yeah. But think about it. The alternative of doing nothing - which is the policy priority of every single government and macro policymaker - we know where that leads.

It leads to more unemployment, more inequality, higher stock market valuation that drives you to nowhere.

So what I'm trying to say is that you can deal with problems through the fast track or through the slow track.

What Brexit did - and what will be positive from it - is the fact that it gets us to the root of the problem much, much faster.

We are dealing with the issue of Europe having to be less aggressive in terms of its vision.

We have to have the UK deal with the fact that the last time they had a current account surplus was in 1982, when Italy was world champion of football.

So, you know, what I'm saying, really, is that inevitably economic trends lead to change.

The only change you get is when the politics gets out of whack. We are out of whack totally in terms of noise. That is good. And that's also why Trump will be good.

TICKY FULLERTON: Briefly: let's go back to America and Trump. Now, both sides of politics are calling for a reinstatement of 'Glass-Steagall', which separates commercial banking from investment banking activities. What's that going to do to the market, briefly?

STEEN JAKOBSEN: That would be seen, at least by the banks and the banking lobbies, as negative, because it is more regulatory frameworks into a world of too much regulatory framework.

But I have to say, I am of the personal opinion that no financial industry should be left on its own.

I liked the days when I grew up when you had boutique finance. If you needed an M&A [merger and acquisitions] trade, you went to a guy who was an expert.

I don't like supermarkets. I never liked supermarkets. And I think we need to go back to specialisation and giving the best marginal advice.

So to some extent, philosophically, absolutely. But we need anti-cyclical, not pro-cyclical regulations. So in that sense, it's a little bit of a bad harbinger for the markets.