Water isotopes are commonly used as indicators of climate state even though many biases and variations in processes affecting the polar signal have not been quantified. Results from the Melbourne University General Circulation Model suggest the annual cycle explains half of the monthly δ18O variance, and a semiannual variation contributes more than 15 in places. Eddy moisture convergence drives gross accumulation, while stationary flux allows sublimation of 25--30% of the precipitation. Part of the monthly anomaly variance is associated with a dominant annular disturbance in the circulation. This oscillatory mode alters the character of the transport processes through changes to the preferred location and strength of baroclinic cyclones. A Rayleigh model indicates that a third of the continental δ18O anomaly can be explained by temperature-dependent fractionation, while changes to the condensation give 3 times too much depletion. The residual is explained by the migration of the zone from which midlatitude air is entrained into the polar environment by cyclonic storms. The positive phase of the annular mode is associated with an increased contribution from the near-coastal region, which enriches the continental precipitation. Such vacillation introduces bias in reconstruction using modern analogues because the spatial temperature-isotope slope is modified.