Trading CPI in forex trading 2025
In this article we are going to talk about one of the most important economic indicators called CPI. the news related to the Consumer Price Index is very important for forex traders because the news related to this index is very influential on the forex market. What is the Consumer Price Index (CPI)? It means the price that consumers or people pay to buy a goods. The prices of goods are always changing and mostly increasing, and this increase in the price of goods causes inflation in a country, this index shows us the inflation in a country, so we can say that CPI means inflation. For example, if we buy a cake today for $4 and next week we buy it for $5, this is called rising prices or inflation.
Why is inflation and CPI index important for us?
These indicator and the rate of inflation are very important for traders and investors in Forex and crypto markets, if the value of the CPI index of a country is higher than the predicted value, its currency becomes strong and grows and this currency becomes attractive for traders.
When the CPI index increases, banks increase their interest rates, which makes the desired currency stronger. Banks use interest rates to control inflation and the CPI index.
How Does the CPI Index Affect the Forex Market?
If the published CPI index is lower than the previous value and the predicted value, it causes our target currency to weaken. but if the value of our index is higher than the previous value and the predicted value, it makes that currency stronger. To view this index, you can use the Forex Factory website.
Photo by Forex Factory
Notice in the image above, the value of the published CPI index is higher than the previous value and the predicted value, and this makes the Australian dollar currency stronger.
Photo by TradingView
In the image above, we have marked the release time of the CPI index on the chart with a green box, as you can see, at this time the market has started to form bullish and green candles and the price has risen.
At this time we could make a profit by opening a buy position.
We hope this article was useful to you.