The overall market sentiment is risk-on. The S&P 500 index (US 500) is getting close to the all-time high. Oil is recovering quickly from its recent losses.
Can you make a profit on American inflation?
The US monthly CPI is announced at 15:30 MT time on Thursday.
Instruments to trade: EUR/USD, USD/JPY, GBP/USD, AUD/USD
Last year, US inflation was moving within the corridor of 0.1% to 0.4%, with the exception of January and September when it came at the zero level.
December 0.2% was just a bit lower than the expected 0.3% and did not create a significant reaction in the USD. The currency did not show any noticeable response to that announcement: EUR/USD, USD/CAD, USD/JPY, and other pairs continued their respective trends with little correlation to the released CPI.
Hence, it is safe to assume that the USD will keep its respective course against other currencies on the day of the CPI release unless the discrepancy between the market expectation and the actual number is significant.
- If the indicator substantially outperforms the forecast, the USD will be boosted.
- If the indicator undershoots the expectations, the USD will drop.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!
What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
Today the Fed will make a policy statement at 21:00 GMT+3. This event will affect all the currency pairs with the USD and thus almost the all Forex market!