As I write, the Australian dollar is dropping hard. It has been fairly stable (by currency norms) for quite a while. That changed a few days ago. What’s happening? Is the Saudi/Iran situation intensifying and posing a threat to the oil price, and to those nations that would impact, like Australia? Is it the emergence of media stories outlining how weak and dependent the Australian economy has become?
Is it a new horror show, or an exacerbation of one of the many existing ones?
At this point, not all currencies are dropping, so it could be just local turbulence.
Any tremble in a major trading currency is time to be alert. There can be little doubt that permanent backwardation will be preceded by a precipitous drop in the value of currencies. Hopefully, the Au$ will soon settle back down again.