Another indicator of an economy’s health is the inflation level of the specific economy. Now an indicator of the inflation is the CPI which publishes the average prices of goods and services (e.g. food, transportation, health care) in Europe for example. There can be a significant difference in comparison to the past period of data and therefore this can determine the direction of inflation levels.
|Source||US: Bureau of Labor Statistics
Europe Union: Eurostat
|Measures||Change in the price of goods and services purchased by consumers|
|Usual Effect||If Actual is better than Forecast, it is good for currency|
|Frequency||Released monthly, about 16 days after the month ends|
|Why Traders Care||Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate|