US Consumer Credit Report Cites Lower Use of Revolving Credit
THE TAKEAWAY: [Consumer Credit drops in June to $6.459B] > [Decline in revolving Credit]>[EURUSD falls 6 pips]
The June U.S. Consumer Credit Report missed expectation printing an increase in credit usage of only $6.459B compared to the consensus estimates of $10.25B, the weaker figure was followed by a decline in EURUSD. In addition the May figure was revised lower from $17.117B to $16.698B. The report went out to cite that Total Consumer Credit outstanding rose by 3.0 percent (annually adjusted) during the month of June. The rise was due an increase in nonrevolving credit, which tracks loans such as auto and student. The gain in nonrevoling credit was partially offset by a decline of 5.1 percent (annually adjusted) in revolving credit, which tracks loans without a fixed number of payments such as credit cards charges.
5 Min GMT EURUSD MarketScope Chart, Created by Adrian Robles
The EURUSD fell 6 pips on the release of the data, indicating that traders may have interpreted the slowdown in the pace of credit usage as a positive for the US Economy. It is also important to note that the EURUSD was already trending lower throughout most of the US trading session.
The drop in revolving credit during June was accompanied by a 0.5 percent drop in retail sales over the same period. Additionally the June Consumer Confidence Index fell 2.4 points to 62.0, and reported that consumer were concerned about the short-term outlook of the U.S. economy. During July Consumer Confidence rose moderately and economists are forecasting that retail sales picked have picked up. These more recent figures point to the possibility that consumer demand has picked up slightly since the pull back in June.
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