Inflation Indicators
Price stability measures and monetary policy impact
Inflation's Currency Impact
Inflation data directly influences central bank policy decisions and currency valuations. Higher than expected inflation typically leads to hawkish policy shifts and currency strength, while low inflation can trigger dovish responses. CPI and PCE releases often cause 80-250+ pip movements, especially when significantly deviating from expectations.
Consumer Price Index (CPI)
HIGH IMPACT - ALL
Most widely watched inflation measure, tracking cost of goods and services for consumers.
Core CPI
HIGH IMPACT - ALL
CPI excluding volatile food and energy prices, Fed's preferred trend inflation measure.
PCE Deflator
HIGHEST IMPACT - USD
Personal Consumption Expenditures price index, Fed's preferred inflation measure.
Producer Price Index (PPI)
MEDIUM IMPACT
Wholesale inflation measure, leading indicator of future consumer price pressures.
Inflation Expectations
POLICY DRIVER
Market and consumer expectations for future inflation, influences central bank policy proactively.
Import Price Index
LOW-MEDIUM IMPACT
Cost of imported goods and services, reflects currency strength and global price pressures.
Trading Inflation Data
High Inflation Impact
- ↑Above-target inflation → Hawkish central bank → Currency strength
- ↑Rising inflation expectations → Rate hike probability increases
- ↑Core inflation surge → Sustained policy tightening expected
Low Inflation Impact
- ↓Below-target inflation → Dovish policy → Currency weakness
- ↓Deflation risks → Rate cut expectations → Accommodation policies
- ↓Disinflation trend → Extended low rate environment