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USD/JPY Steady at Improved U.S. Consumer Credit Report

Courtney Edwards

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

USD_Consumer_Credit_body_Picture_1.png, USD/JPY Steady at Improved U.S. Consumer Credit Report

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

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