Trading the News: U.S. Consumer Price Index (CPI)
Updates to the U.S. Consumer Price Index (CPI) may undermine the recent rebound in EUR/USD[1] as the headline reading is expected to climb 2.5% in October after expanding 2.3% per annum the month prior.
Signs of heightening price pressures is likely to heighten the appeal of the greenback as it encourages the Federal Reserve to deliver a 25bp rate-hike in December, and the ongoing shift in U.S. trade policy[2] may push Chairman Jerome Powell & Co. to extend the hiking-cycle as ‘several participants reported that firms in their Districts that were facing higher input prices because of tariffs perceived that they had an increased ability to raise the prices of their products.’
In turn, a material uptick in the CPI may trigger a bullish reaction in the dollar, but a batch of lackluster data prints may fuel a larger rebound in EUR/USD as it saps bets for above-neutral interest rates. Sign up and join DailyFX Currency Analyst David Song LIVE[3] for an opportunity to discuss potential trade setups.
Impact that the U.S. CPI report has had on EUR/USD during the previous release
|
Period |
Data Released |
Estimate |
Actual |
Pips Change (1 Hour post event ) |
Pips Change (End of Day post event) |
|
SEP 2018 |
10/11/2018 12:30:00 GMT |
2.4% |
2.3% |
-2 |
+23 |
