The rise in the exchange rate would also be acting to dampen, at the margin, the rate of inflation for tradeables. All these factors presumably help to explain the recent pattern of moderate price increases in the face of stronger demand and output growth. But it would be a mistake to rely too heavily on these influences over a long period.
While domestic supply has been reasonably elastic of late, it is surely not infinitely so. And while global sources of supply are steadily becoming more important for many products, large parts of demand are still overwhelmingly supplied from domestic sources.