While much of the sell side and academic analysis in Australian economics is still stuck on exceptionalism, it is my sense that the RBA oil tanker is swinging slowly but surely, and perhaps decisively, towards taking steps to drop the Australian dollar a lot lower.
This is no mean statement given how slow the bank has been in taking up arms in the global currency war. But from my point of view the tanker is turning for three reasons and the end result is that Australian monetary policy may be about to swing more aggressively dovish vis the currency than it has been to this point.
The first reason is the most important. The RBA is a data-following central bank above all else. When it’s been wrong one way or another it corrects its path without fuss. Australian data has been good for the past few quarters but is also a slowly turning oil-tanker that is headed into oncoming swells:
