The reserve bank of Australia has shifted from a bias to raising...

The reserve bank of Australia has shifted from a bias to raising rates to opening the possibility the next move might be a lowering of interest rates.

I think the RBA has been spooked by property price falls in Australia affecting the wider economy.

They are trapped though. If they cut interest rates, the A$ will crash faster than they can intervene. Australia runs a trade deficit, a current account deficit and the international reserves of the RBA are hardly world beating.

The A$ to US$ exchange rate is in danger of breaking down ... badly ... if the A$ trades below about $0.68. One interest rate cut should do it.