Forex Blog | Using the Consumer Price Index

Forex Blog | Using the Consumer Price Index

Our Forex Blog features a wide range of topics to help new traders become comfortable in the Forex game. Although our Forex Blog only touches upon a few topics, we believe that they are vitally important to your success. This Forex Blog article is going to talk about the Consumer Price Index (CPI), and what it means for the Forex Market.

The CPI is a statistic that many traders take into consideration before entering or exiting a strategy. The CPI is an indicator that helps track the price of goods and services to check if there is any inflation, deflation, or stagflation. This indicator is released monthly and can help assist Forex traders in deciding what currency pairs looks bullish, and which are bearish.

The CPI has many uses besides Forex trading, as it is an economic indicator and not just a financial statistic. Our Forex blog will try not to steer too far away from the “investing” aspect of the CPI, however I want to drive home how important this statistic actually is.

The CPI is so powerful that the Federal Reserve Interest Rate Policy is based off of it. Other aspects of life that are linked to the CPI are wages, hedging, and a big warning sign for hyperinflation. Our Forex Blog does in deed agree that this indicator is extremely powerful and should not be overlooked.

Because inflation/deflation/stagflation are linked to economies, and currencies are affected by economic indicators, the CPI should be studied in detail. Our Forex Blog cannot go over every detail about this, however we do encourage all of our readers to take some time out of their schedule and try and make the CPI a normal factor in your Forex Trading Strategies.

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