Will the CPI Crash the USD?
The most impactful releases of this week will fill the market with volatility and sharp movements. Be ready to take action!
US PCE Adds Fuel to the Fire
What will happen?
The United States Bureau of Economic Analysis will release monthly Personal Consumption Expenditures (PCE) on April 29, 15:30 GMT+3. PCE Index is quite similar to Consumer Price Index (CPI). The only difference between them is that CPI excludes foods and energy. Food and energy can take up to 25% of PCE, but they are highly seasonal. Without these volatile components, investors consider PCE a more accurate inflation indicator.
Why is it important?
Traders keep a close watch on it because of the rumors that this is Fed's favorite inflation measure. Nevertheless, CPI is released about ten days earlier and tends to garner the most attention. Last month, a higher-than-planned result caused an above-average bearish movement. This time volatility may be the same (or higher) as the inflation in the US is at 40-years high.
How to trade on US PCE release?
The results will have an impact on all USD pairs.
- If it turns out to be higher than expected, the USD will rise.
- Otherwise, USD will fall.
Check the economic calendar
Instruments to trade: USDJPY, USDCAD, EURUSD.
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