Fiper | Consumer Price Index

The consumer price index determines the rate of inflation from the point of view of consumers when they buy goods and services. This index is also considered one of the most important indicators that traders monitor and is considered a basic indicator for determining financial inflation and buying trends in society in the United States.
The main goal that the central bank seeks is to achieve price stability, and among the ways to fight inflation, the central bank seeks to raise interest rates to help prices fall. Higher interest rates attract foreign investment, thus increasing the demand for the country's currency
The US annual inflation rate likely slowed to 3.1% in June of 2023, which would mark the 12th straight month of declines and the lowest reading since March 2021. The slowdown is partly due to the higher base effect from last year when a boom occurred. In energy and food prices pushed the general inflation rate to its highest level in 1981 at 9.1%. Also, rental inflation is likely to slow while used car prices are expected to decline. On a monthly basis, the CPI for June is expected to have increased by 0.3%, significantly higher than the 0.1% increase in May. Meanwhile, the core inflation rate is expected to decline to 5%, the lowest level since November 2021, from 5.3% in May. The monthly rate is expected to drop to 0.3% from 0.4%.

Outlook for today's statement and how it will affect the currency

Expectations indicate that inflation data will decline to a rate of 4.1%.
If the statement is issued below expectations, it will affect the currency in a negative way, but if the statement is issued at a rate higher than expected, it will affect the currency in a positive way.

Note:

How should we look at today's statement?

Recently, we have been witnessing a continuous decline in inflation, but in return, an increase in the interest rate from the Federal Reserve, and this is to combat high inflation rates
In the last meeting, and for the first time in a very long time, the Federal Reserve proves interest rates, and the success of interest rates will be evident today with the release of the Consumer Price Index.

Outlook and beyond?

In the event that we record a rise in the consumer price index, we will witness a rise in the US dollar, and by 90%, the Fed will raise interest rates at the next meeting by about 25 basis points. As for recording a rise higher than the rate of 4%, the possibility of raising interest rates by 50 basis points will be on the table in a strong way, and we are talking about a change Complete from a downtrend for the US dollar to an uptrend