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CPI Fundamentals Every Forex Trader Should Know

Name: CPI Fundamentals Every Forex Trader Should Know
Uploaded: 2024-01-16T07:00:21+00:00
Duration: 1 min 6 s
Channel: Alan Solarsh
Description: Alan Solarsh explains how core CPI (core inflation) readings relative to consensus and prior prints drive expectations for Federal Reserve rate moves…

16 Jan 2024 · 1 min

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1:06

Alan Solarsh explains how core CPI (core inflation) readings relative to consensus and prior prints drive expectations for Federal Reserve rate moves. Higher-than-expected CPI is described as inflationary, likely prompting Fed rate increases, which attract capital into the US dollar (raising USD pairs and putting downward pressure on gold/XAUUSD). Conversely, lower-than-expected CPI can support USD weakness and USD-based pairs rising.

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You can see how we've got core inflation cpi. We've got core CPI over here, and core inflation rates as well. These are the numbers that we need to be checking and we need to be monitoring. If the consensus number or the actual number that happens is higher than consensus and previous, then this as is an inflationary market and you can expect the us, the Fed to increase interest rates. If they increase the interest rates, then what happens is that institutions and retail traders will invest their funds into the dollar because there is no holding cost on the dollar and people will get a higher interest on their money. If you're trading XAU USD, then you can expect the price to drop if the numbers increase. If the numbers decrease, you can expect your USD pairs anything USD based to go up.