Consumer Credit

Consumer credit is an economic indicator defining the level of consumer demand. In other words, it is the credit provided to individuals for acquiring goods and services for personal use.

Consumer credit means using of credit system through personal borrowing, credit and payment cards, credit lines or payment by installment. There are various purposes of credit: the credit for personal needs (for example, a car) or buying cards via credit card as the most part of the US citizens do. In general, the USA is the country, where crediting took entered such a level that people can barely do without it. People like "living on credit", thereby satisfying their need of material comfort. Such thing as “credit history” in the USA is not just a credit history of some citizen, but a statistical profile describing man's solvency, financial biography, which reaches not only traditional banks. It enables finance entities to define acceptable amount of credit and conditions provided to a borrower.

Apart from credit history, availability of consumer credit depend on macroeconomic conditions. In the period of economic upsurge it is rather easier to get credit than in the time of decline. The reason is decline makes financial institutes be more inclines towards risk and set tougher requirements to borrowers.

Consumer credit report is published monthly about 7th date at 3 p.m (New York) or 11 p.m Moscow time. Figures above expectations are considered as positive for USD, whereas figures below expected reveal a more negative attitude to dollar.

Implications for Forex market

Consumer credit asserts minor (inessential) impact on the Forex market. Growth of indicator signalizes that citizens are not afraid of borrowing and are confident about economic stability. All those factors are definitely favorable for dollar consolidation. Also it is noteworthy that this indicator is subject to season fluctuations. Specifically, on the threshold of big holidays such Christmas and New Year the number of borrowers dramatically increase, with the result that the report is often reconsidered.

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