Inflation in the United States (USA), measured by changing the consumer price rate (CPI), increased to 2.4% per year from 2.3% in April, Bureau of Labor Statistics (BLS) said on Wednesday. This reading was below market expectations of 2.5%.
Follow our living US inflation and market reaction data.
The basic CPI, which excludes unstable prices of food and energy, increased in May by 2.8%, corresponding to the flow of April. Every month, CPI and basic CPI increased by 0.1%, compared to the estimates of analysts, respectively 0.2%and 0.3%.
Market reaction to CPI inflation in the USA
The American dollar (USD) had sales pressure with an immediate reaction. During the press, the USD indicator fell by 0.37% on 98.68.
The price of the American dollar today
The table below shows a percentage change in the US dollar (USD) compared to the main crucial currencies. The American dollar was the weakest in relation to the euro.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.44% | -0.29% | -0.25% | -0.11% | -0.18% | 0.03% | -0.38% | |
| EUR | 0.44% | 0.13% | 0.22% | 0.30% | 0.25% | 0.40% | 0.05% | |
| GBP | 0.29% | -0.13% | 0.06% | 0.20% | 0.14% | 0.28% | -0.09% | |
| JPy | 0.25% | -0.22% | -0.06% | 0.00% | 0.05% | 0.22% | -0.20% | |
| BOOR | 0.11% | -0.30% | -0.20% | -0.00% | -0.03% | 0.11% | -0.30% | |
| Aud | 0.18% | -0.25% | -0.14% | -0.05% | 0.03% | 0.15% | -0.22% | |
| NZD | -0.03% | -0.40% | -0.28% | -0.22% | -0.11% | -0.15% | -0.38% | |
| CHF | 0.38% | -0.05% | 0.09% | 0.20% | 0.30% | 0.22% | 0.38% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose an American dollar on the left column and move along the horizontal line to Japanese Jen, the percentage shift displayed in the field will represent USD (base)/JPy (quote).
In this section below the consumer price indicator (CPI) is published as a preview of the data at 03:00 GMT.
- The US consumer price indicator is expected to rise by 2.5% y / r. In May, at a stronger pace than in April.
- It is forecasted that the annual basic inflation of CPI is up to 2.9%.
- Maja inflation can affect the Fed policy prospects, swaying an American dollar.
. Consumer price indicator (CPI) It is expected that the data from May emphasize the reception of inflation in the United States (USA). Investors will examine the details of the report to see if the up-to-date tariff system of US President Donald Trump increases price pressure, which may have significant implications for the perspective of the Federal Reserve Policy (FED).
The statistics of the US work statistics are to publish Cpi Data on May on Wednesday at 12:30 GMT. Instant market response can cause the a quote for the American dollar (USD).
What can you expect in the next CPI data report?
Measured by the change of CPI, inflation in the USA is forecast Growth within 2.5% in May, more than 2.3% enhance in April. The basic CPI inflation is expected, which excludes unstable categories of food and energy, will enhance by 2.9% y / y, compared to a 2.8% enhance reported last month.
For every month, CPI and basic CPI are to enhance by 0.2% and 0.3%, respectively.
In writing the report, analysts from TD Securities stated: “The basic CPI probably remained unchanged in May, publishing an increase of 0.23% m/m. We expect that the soft prices of travel services still maintain the series because the symptoms of passing tariffs will appear.
“The header inflation of the CPI probably lost its speed, partly due to the high seclusion of gas prices. Pencil in the header and cores inflation CPI at 2.4% and 2.9% y/y/y, respectively,” – they added.
How can the American consumer price index report affect EUR/USD?
Inflation data for Maja may affect the market price of the FED rate prospects and affect USD results in a short period. At the political meeting, the FED maintained the rate of federal funds in the range of 4.25% to 4.50%. Comments of the FED officials have since emphasized that decision -makers are ready to remain patient in relation to politics, unless there is a significant deterioration of the economic situation in the perspective of the labor market. “I see a greater risk of growth for inflation and a potential risk of decline for employment and production growth,” said a member of the Governor’s council Adrian Kugler. Meanwhile, the President of Chicago Fed Austan Goolsbee noticed that they have to wait and check if the tariffs have a large or little influence on inflation before taking a stage of politics.
The last employment report from the US showed it Non -Farmy payroll It increased by 139,000 in May, exceeding market expectations in the amount of 130,000. The probability of CME Group Fedwatch tools of 25 base points (BPS) reduced in July below 20% after this data from about 30% earlier this week, which suggests that the markets assessed the labor market as a healthy enough so that the Fed could delay the reduction of the rate.
A significant additional surprise in a monthly CPI reading, which is not distorted by the basic effects, can increase USD with immediate reaction and weighed EUR/USD Because such reading can write expectations about Fed Lowering the policy rate only once this year. And vice versa, a print below 0.2% in this data may soften the fears that inflation will remain sticky in the second half of the year due to tariffs and harm USD. In this scenario, EUR/USD may be stubborn.
Eren Sengezer, leading analyst at the European session in Fxstreetoffers short technical perspectives for EUR/USD and explains:
“The relative strength indicator (RSI) on the daily table is above 50, but moves sideways, suggesting that the stubborn prejudice remains intact, and at the same time not without momentum.”
“In advance, the immediate level of resistance is at the level of 1.1575 (April 21, the high, middle point of the four-month growing regression channel) before 1,1700 (stagnant level, round level) and 1.1860 (upper limit of the ascending channel). Alternatively, 20-day, a plain average moving (SMA) can be perceived as the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support before the first support 23.6%.
Frequently asked inflation questions
Inflation measures the enhance in the price of a representative basket of goods and services. Header inflation is usually expressed as a percentage change based on month to month (Mom) and year on year (Yoy). Basic inflation excludes more unstable elements such as food and fuel, which can change because of geopolitical and seasonal factors. Basic inflation is the number of economists focus on the level of central banks, which are authorized to maintain inflation at a management level, usually about 2%.
The consumer price indicator (CPI) measures the change in the prices of the basket of goods and services over time. This is usually expressed as a percentage change on the basis of month to month (Mom) and year on year (Yoy). Core CPI is a number directed by central banks because it excludes unstable food and fuel cartridges. When Core CPI increases above 2%, it usually causes higher interest rates and vice versa when it drops below 2%. Because higher interest rates are positive for currency, higher inflation usually causes a stronger currency. On the contrary, it is true when inflation falls.
Although this may seem contrary to intuition, high inflation in the country increases the value of its currency and vice versa for lower inflation. This is due to the fact that the central bank usually raises interest rates to combat higher inflation, which attracts more global influx of capital than investors looking for a lucrative place to park their money.
Earlier, gold was investors of assets, to which he turned to high inflation, because it retained its value, and although investors often buy gold for his protected real estate in times of extreme market riots, this is not the most of the time. This is because when inflation is high, central banks set interest rates to combat it. Higher interest rates are negative in the case of gold because they enhance the costs of having gold in relation to assets on interest or place money on the cash deposit account. On the other hand, lower inflation is positive for gold because it lowers interest rates, thanks to which glowing metal is a more profitable investment alternative.
