The Australian dollar hit a new low for this cycle yesterday, when it bounced off USD0.853 following comments by the deputy governor of the Reserve Bank of Australia (RBA).

The currency presently trades near USD0.855, down 22.3% from its high in mid-2011.

In an address to the Australian Business Economists annual dinner yesterday, RBA Deputy Governor Philip Lowe made two remarks at the expense of the currency.

First, he noted that the resulting slide in commodities prices since the end of the so-called global commodity supercycle should further undermine support for the aussie.

“If the exchange rate is to play its important stabilizing role, it needs to go down when the terms of trade and investment are declining,” Lowe said. “We have seen some adjustment, but if our assessment of the fundamentals is correct we would expect to see more in time,” he continued.

Translation from egghead into layperson: The aussie is overvalued, and the bank expects it to decline in sympathy with commodities prices.

Given Australia’s abundant resources, the currency has enjoyed unusual strength owing to the perception that it’s backed by hard assets. But the aussie’s performance relative to other currencies has actually hurt the country’s economy by making its exports less competitive.

As such, one of the goals of the RBA’s monetary policy has been to push the exchange rate lower, with the hope of providing support for the country’s exporters, as well as encouraging growth in the non-mining sectors.

The central bank has been on a rate-cutting cycle since late 2011, and its benchmark cash rate has remained at 2.5% since August of last year. Although that rate is at an all-time low, it’s still significantly higher than rates among its zero-bound developed-world peers.

And that’s attracted capital inflows from investors looking for better returns, which is the other key reason for the currency’s strong support.

But that could soon diminish if rates start to rise in the U.S., and the RBA decides to cut rates yet again.

Lowe observed that the RBA’s monetary largesse is still having a positive effect on the country’s economy. But if that should wane, he noted that the central bank is “in a fortunate position that if we do need to lower interest rates, we can.”

That hardly sounds definitive, but to central bank watchers who carefully parse every utterance emanating from the RBA, it’s akin to opening the door to another rate cut.

For now, most traders are betting on the status quo prevailing through at least mid-2015, according to futures data aggregated by Bloomberg.

However, sentiment starts to increasingly shift toward the downside as the months progress. While the data suggest a 96% probability that the RBA holds rates steady in the near term, that number falls to 55.7% for July, with the balance indicating expectations of at least a quarter-point cut.

Among the outliers, according to the Sydney Morning Herald, is global fund manager AllianceBernstein, which said the “collapse” of commodity prices and a cooling property market in Australia could force the RBA’s hand next year.

According to Bloomberg’s survey of institutional economists, the aussie is forecast to bottom at USD0.81 in 2016, and then rise moderately thereafter, to USD0.83 in 2017.