The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.
CPI is Moment of Truth for the Dollar
What will happen?
United States Bureau of Labor Statistics will release monthly CPI and core CPI on February 10, 15:30 GMT+2. The Consumer Price Index measures the average change in prices consumers pay for a basket of goods and services. The CPI statistics cover a variety of individuals with different incomes, including retirees, but do not include specific populations, such as patients of mental hospitals.
How will it affect the dollar?
As you know, inflation in the US hit a record-high level with a 7% rate. As a result, the US created a plan to address rising prices, including the end of bond-buying and hiking rates. However, these measures haven't had the effect yet. Investors worldwide watch closely after the US CPI release because the greenback is the world's reserve currency. Thus, high numbers for the US mean a price boost for almost every county.
The last release on January 12 created a massive bullish movement in EUR/ USD, pushing the pair 900 points higher. This release will likely have the same impact on the USD. However, the numbers can turn out to be less than expected. In that case, USD will rise on expectations of sooner rate hikes or the larger number of hikes for 2022. As for now, the market expects five rate increases throughout 2022.
How to trade on the CPI release?
Due to the importance of CPI data, it may influence gold and USD pairs. Gold is considered a hedge against inflation, but high numbers increase the chance for rate hikes so that the metal may fall against the greenback.
- If actual numbers beat expectations – the USD will rise, and gold (XAU/USD) will fall.
- Otherwise, gold will rise.
Check the economic calendar
Instruments to trade: XAU/USD, EUR/USD, NZD/USD, USD/JPY.
The US Bureau of Labor Statistics will announce average hourly earnings, nonfarm employment change (NFP), and the unemployment rate on May 6, at 15:30 MT time.
The Bank of England will publish its Monetary Policy Report and Summary, Official Bank Rate, and its votes on May 5 at 14:00 MT.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.