Australia's trade deficit blew out to a six-month high in   December, widening to $3.5 billion as prices for the country's key resource exports tumbled. 
The nation's trade position has steadily deteriorated amid the slump of iron ore, its biggest export product. The $32.7 billion trade deficit in 2015 is a new record, according to data going back to 1971. 
And the outlook isn't cheery, with the latest plunge in oil prices rattling world markets and prompting the RBA to concede a rate cut might be needed to stem any lasting economic damage.
"Record deficits persist as the collapse in commodity prices is only partly offset by a lower currency and strong export volumes," says UBS economist George Tharenou.
"The trade sector remains under pressure and a further currency depreciation would be helpful."
The speculation has seen the Aussie dollar drop more than a full US cent in two sessions to touch US0.7010&cent;. Investors are now pricing in a 36 per cent probability of a further cut in interest rates by   April, with the bets on a rate cut by   July rising to 76 per cent.
So far, the central bank has refused to be panicked by global events, holding rates steady at 2 per cent after its first policy meeting of the year on Tuesday.
If it was to cut rates, it wouldn't be alone: The Bank of Japan has cut rates below zero this year and the European Central Bank flagged a possible expansion of stimulus measures for   March.

Commodities dilemma
Australia is especially vulnerable because of its position as a major exporter of resources, whose prices are in free fall.
The RBA's own index of commodity prices sank by a quarter in the year to   January, dealing a hammer blow to export earnings, mining profits, wages and tax receipts.
The country's terms of trade - which is what the country gets for exports compared to the cost of imports - looks to have dived around 5 per cent in the fourth quarter to hit a decade-low.
The effect was all-too apparent in trade numbers from the Australian Bureau of Statistics released on Wednesday, which showed the value of goods exported in   December was the lowest in almost five years.
With total exports falling 4.7 per cent and imports down only 1.5 per cent, the country's trade deficit widened by nearly a third to $3.5 billion. The figure was far worse than economist consensus forecasts of $2.5 billion.
The one bright spot was service exports, which climbed to record highs as more tourists were lured to Australia because of the cheaper Aussie dollar.
In all, travel exports were over 15 per cent higher in   December than a year before, a boost for jobs given the labour-intensive nature of tourism. 
Reuters/Bloomberg