How Will The US Dollar Respond To The US Consumer Price Index (CPI) Report?

Fundamentally, the US consumer price index (CPI) helps measure the rate of change in the price of goods and services. This aid in gauging the level of inflation in a country.

In the month of March, the United States inflation remained fairly stable, and experts anticipate a further decline below 5.0% year on year. That would match the Federal Reserve’s goal of driving inflation down, close to the optimal range of 2% to 3%. The positive is that its goal of maximum employment is attained as the job data remains high with the unemployment rate sitting low at 3.4%.

Most of the inflation is accounted for by changes in consumer prices. As inflation is one of the core determinants of currency strength, the Federal Reserve raised the interest rate further to 5.25% in other to comply with its responsibility of minimizing price hikes.

Basically, inflation is crucial for currency valuation. The CPI data release will either drive the US dollar index gains or losses.  In response to Friday’s 253k job addition, the dollar gained massively against the EUR/USD, GBP/USD, USD/CAD, Gold, and the silver commodity market space. However, its gains are gradually losing momentum and dropping to the downside.

If the consumer price Index (CPI) goes higher, it could drive dollar gains up as this will prompt the Fed to increase interest rates further in other to retain its currency strength.

Nevertheless, Traders should brace themselves up for a period of high volatility as an increase in Consumer Price Index will strengthen the USD while a decrease will weaken the USD.

In response to the news release, trade the financial market with the following trading instruments on the ACT Markets platform(, as they are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, XAGUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOILUS Oil, Facebook, Amazon, Tesla, etc.

Time Schedule for the CPI release:

Date: Wednesday 10th May 2023      

 Time: 1:30 pm (GMT + 1)

Amogo Solomon is a Broker-Dealer/Market Research analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics, and Forex Broker Dealing. He specializes in Forex Dealing, markets Analysis, Currency research, forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.