The Takeaway:U.S. Consumer Credit (Dec) > +$14.6 billion versus +$14.4 billion expected > Consumers ability to borrow may be increasing > USDJPY Neutral
Consumer credit increased at a seasonally adjusted annual rate of +6.5% to $14.6 billion in December 2012, according to the Federal Reserve. Bloomberg economists expected a $14.4 billion increase. The surge in credit was fueled by a jump in student loans, personal loans, and auto loans. This is the largest gain since 2001. In the prior month, consumers increased their borrowing by $16 billion to a seasonally adjusted record of $2.77 trillion.
Lending by the Federal Government, which is primarily for educational loans, increased by $5.5 billion in December. Revolving debt, including credit cards, fell by $3.6 billion, the most since July. Labor market gains might be boosting consumer’s ability and willingness to borrow for big-ticket items.
USDJPY 5-Minute Chart: February 7, 2013
Chart from FXCM Trading Station, created by Courtney Edwards
The USDJPY showed little movement at the time of the consumer credit report. The pair traded at 93.53 at the release. Earlier today, the pair continued to trade at its highest levels since mid-2010, putting strong pressure on the 94 line.
--- Written by Courtney Edwards, DailyFX Research
New to the FX market? Save hours in figuring out what FOREX trading is all about.
Take this free 20 minute “New to FX” course presented by DailyFX Education. In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading.
Register HERE to start your FOREX learning now!