10 Jun 2015
Australia’s consumer sentiment deteriorates in June, drops to lowest since Jan
FXStreet (Mumbai) - Consumer confidence fell sharply this month in Australia, more than unwinding the large boost in May when the central bank lowered interest rates for the second time this year.
The Westpac-Melbourne Institute Consumer Sentiment index tumbled 6.9% in June from 102.4 to 95.3, where a figure above 100 indicates optimism on the current economic conditions and their personal finances, while a reading below 100 signals pessimism. This was the lowest reading for the index since January.
The large drop in confidence surprise markets on the downside, even though markets expected a minor retreat from the 6.4% leap in May when the Reserve Bank of Australia (RBA) decided to cut the cash rate to a record-low 2% in efforts to support demand.
Westpac economist Matthew Hassan said on Wednesday, "It now appears that last month's surge of optimism was a brief relief rally following the Reserve Bank of Australia's May rate cut and a budget that was less damaging than many feared."
The Westpac-Melbourne Institute Consumer Sentiment index tumbled 6.9% in June from 102.4 to 95.3, where a figure above 100 indicates optimism on the current economic conditions and their personal finances, while a reading below 100 signals pessimism. This was the lowest reading for the index since January.
The large drop in confidence surprise markets on the downside, even though markets expected a minor retreat from the 6.4% leap in May when the Reserve Bank of Australia (RBA) decided to cut the cash rate to a record-low 2% in efforts to support demand.
Westpac economist Matthew Hassan said on Wednesday, "It now appears that last month's surge of optimism was a brief relief rally following the Reserve Bank of Australia's May rate cut and a budget that was less damaging than many feared."