RBA rate hikes still weighing even as confidence ticks higher

Australian consumer confidence rebounded in early July, with the Westpac-Melbourne Institute index rising 4.1% to 83.9, but the improvement looks fragile and may already be outdated because the survey ended before the latest oil-price spike tied to renewed Middle East tensions. The article argues the bounce was driven mainly by temporary petrol-price relief rather than a durable improvement in the economic outlook: future family finances jumped 13.4%, while five-year economic expectations rose only 0.7%. Underlying sentiment remains weak, with the index still in the bottom 10% of its 50-year history. The Reserve Bank of Australia’s three rate hikes this year to 4.35% continue to weigh on households, and about 60% of respondents still expect mortgage rates to rise further. Overall, the piece suggests the AUD’s support from improved consumer sentiment is limited, especially as higher fuel costs and tighter monetary policy threaten confidence going forward.