(Bloomberg) -- Australia’s consumer confidence edged down on concerns about the broader economy, including a weaker currency and uncertainty about the timing of interest-rate cuts.

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Sentiment slid 0.7% in January to 92.1 points, a Westpac Banking Corp. survey showed Tuesday. While the consumer mood has improved over the past year it still remains gloomy, with 100 points the dividing line between pessimism and optimism.

“It is possible that consumers were reacting to news about the depreciation of the Australian dollar against the US dollar, which resulted in some negative headlines about the outlook for interest rates and the broader economy,” said Luci Ellis, chief economist at Westpac. “Consumers’ assessment of their finances compared with a year ago reversed the gains in December.”

The Australian dollar has declined almost 8% against the greenback in the past three months, the worst performer among major currencies outside the kiwi.

Household sentiment has been in the doldrums in the post-pandemic period as a surge in inflation prompted the Reserve Bank to raise rates to 4.35%, where they have remained since November 2023. That has weighed on the private sector, with the economy barely expanding in the second and third quarters of 2024 and the property market losing steam.

“Within the overall view on interest rates in January, homeowners with a mortgage were more likely to expect a rate cut than either renters or outright owners,” Ellis said. 

The survey was carried over Jan. 6-9. 

Other key data points: 

• Consumers’ assessment of their finances compared with a year ago fell 7.8% to 77.7
• Forward-looking measures were more stable, as was consumers’ assessment of whether now is a good ‘time to buy a major household item’
• The ‘time to buy a major household item’ sub-index increased 1.8% to 90.8
• The Westpac–Melbourne Institute Unemployment Expectations Index rose 2.8% to 127.2 points (a higher reading means more consumers expect unemployment to rise over the year ahead)
• The ‘time to buy a dwelling’ sub-index rebounded by just over 10% in the month to 89.9

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