CAD: is Canadian GDP puzzled?
Canadian monthly GDP will be out at 15:30 MT time on Friday.
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.
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