Consumer Price Index (CPI)
The CPI is a data calculated and released by the United States Bureau Of Labor Statistics (BLS) monthly that tracks change in the cost of living i.e., change in the price of everything from essential items like coffee, toothpaste, haircuts, rents, to luxury items like exotic cars, holiday homes, and many more of the urban consumers in the United States.
Consumer price changes are what account for the majority of the inflation. The inflation rate affects currency valuation because it determines how much the central bank can raise interest rates in order to keep inflation under control.
Because the CPI is used as economic indicator to measure inflation, it is often used to determine the strength or weakness of the dollar. Being a Dollar based report, the CPI is expected to impact on the USD related pairs.
The CPI calculation is based on the following categories from the BLS.
- Food at Home: Cereals and Bakery Products. Meats, poultry, fish, eggs. Dairy an relate products. Fruits and vegetables. Nonalcoholic beverages and beverage materials. Other food at home.
- Food away from Home: Full-service meals and snacks. Limited service meals and snacks.
- Energy Commodities: Fuel Oil. Gasoline (All types)
- Energy Services: Electricity. Natural Gas (Piped)
OTHER ITEMS (Less Food & Energy):
- Commodities: Apparel. New Vehicles. Used cars and Truck. Medical care commodities. Alcoholic beverages. Tobacco and smoking products.
- Services: Shelter. Medical care services. Transportation services
The last released CPI was 0.1% which came out on 13th December 2022, less than forecasted figure of 0.3%. This further weakened the Dollar. The Bureau of Labor Statistics has forecasted this month’s CPI m/m to be 0.0%, being the same figure seen in July 2022.
If the actual figure is greater than 0.0%, then it is good for the US Dollar and vice versa.
Quickly get to your ACT MT5 trading platform, and mark up your most preferred USD related assets using your strategy, in anticipation of the incoming volume from the news release.
EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL, USOil, Facebook, Amazon, Tesla, etc.
Time Schedule for The CPI release: Thursday 12th January 2023.
Time: 2:30 pm (GM + 1)
Author: Amogo Solomon
- The New Zealand Dollars (NZD) Now In Focus As The RBNZ Is Set To Hike its Official Cash Rate Further
- DXY BREAKS OUT OF THE DAILY DEMAND – Strong Enough to Start a Bull Market?
- CURRENCY QUAKE: BRICS Alliance Sends Shockwaves Through US Dollar – Will the Retail Sales Say Otherwise?
- CADCHF COOKING A MASSIVE RALLY – The CXY Approaching H4 Demand.
- GOLD BECOMES INDECISIVE – DXY Stuck in Demand Zone.