The most impactful releases of this week will fill the market with volatility and sharp movements.
How Will Consumer Price Indexes Affect USD?
Information is not investment advice
What will happen?
US consumer price indexes (CPI) will be announced at 15:30 MT (GMT+3) on Wednesday, August 11.
The headline indicator presents the price change of goods and services purchased by consumers. The core indicator is based on the same data excluding food and energy, as prices of these goods are highly volatile. The indexes are based on the average price of various goods and services that are sampled and then compared to the previous sampling. Traders and investors look closely at these data as consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices make the central bank raise interest rates.
Last time the actual result was higher than expected, and USD gained 0.71% versus the EUR.
Consumer price index
How to trade on CPI indexes?
- If the consumer price index is greater than the forecast, the USD is likely to strengthen against other currencies.
- If the consumer price index is lower than the forecast, the USD is likely to weaken against other currencies.
Instruments to trade: EUR/USD, USD/CAD, AUD/USD.
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