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Forex: U.S November Consumer Credit Jumped More Than Expected; USD/JPY Mixed

Forex: U.S November Consumer Credit Jumped More Than Expected; USD/JPY Mixed

Renee Mu, Currency Analyst

THE TAKEAWAY:[U.S. Consumer Credit Soared by $16.045B] > [U.S. fundamentals remained strong] > [USD/JPY Mixed]

According to Federal Reserve report today, U.S. consumer credit increased more than forecast in November. The $16.045 billion rises, fourth month since August, followed a revised $14.076 billion increase in October from $14.158 billion originally reported. Also, November consumer credit reading beats the median forecast of economists surveyed by Bloomberg News which called for a $12.750 billion rise.

Revolving debt, which includes credit cards, climbed by $0.8 billion, while non-revolving debt, which includes educational and auto loans, increased by $15.2 billion.

The above-expected credit figure indicates a positive outlook of consumer confidence in U.S. market. According to Fed’s Lacker, fundamentals for U.S. growth ‘remain quite strong’. However, at the same time, consumer credit index has been overweighed expectation in the first three quarters on a quarterly basis as well as in the first three months of fourth quarter on a monthly basis. The continuing growth of consumer confidence at a faster pace may increase the possibility of over-optimism and causing bubbles in the market.

USD/JPY 1-minute Chart: January 8, 2013

Forex_U.S_November_Consumer_Credit_Jumped_More_Than_Expected_USDJPY_Mixed_body_Picture_1.png, Forex: U.S November Consumer Credit Jumped More Than Expected; USD/JPY Mixed

Chart created using Market Scope – Prepared by Renee Mu

The U.S. dollar was mixed in the minute after the November consumer credit was released. At the time this report was written, the USD/JPY pair traded lower at 87.118 yen.

--- Written by Renee Mu DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.