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.

Check the economic calendar

TRADE NOW

economic calendar

economic data

australia

usd

inflation

economy

FBS Analyst Team

More by this author

Similar

15.03.2023 15:42 Crucial News For The Following Week

Consumer Price Index, Existing Home Sales, US Fed rate decision - all of these things we will discuss in our new review. Don't miss it out!

30.01.2023 11:54 Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

20.01.2023 15:54 What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.