US September CPI Overview
Today's US economic docket highlights the release of the latest consumer inflation figures, due for release later during the early North-American session at 1230GMT. The headline CPI is expected to have risen by 0.2% m/m in September and the yearly rate is anticipated to ease further to 2.4% from the previous month's 2.7%.
Meanwhile, core CPI, which excludes volatile food and energy prices, is forecasted to edge higher by 0.2% m/m and 2.3% y/y during the reported month, at a slightly faster rate than 0.1% m/m and 2.2% reported in August.
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below and as observed, the reaction in case of a relative deviation of +0.98 to -1.25 in the core CPI print is likely to be in the range of 24-26 pips during the first 15-minutes and could stretch to around 68-71 pips in the following 4-hours.
How could it affect EUR/USD?
Ahead of the release, the pair climbed to over one-week high level of 1.1575 and even a slight disappointment would be enough to push it through 50-day SMA and the 1.1600 handle towards the 1.1620 supply zone.
Alternatively, a stronger reading will reinforce market expectations that the Fed will continue raising interest by the end of this year, and beyond, and reignite USD rally, which might prompt some aggressive selling and drag the pair back below the key 1.1500 psychological mark.
Key Notes
• US CPI preview: all eyes on this one - Nomura
• EUR/USD Forecast: The Fed is going "loco"
• EUR/USD bounces off lows near 1.1530, US CPI on sight
About the US CPI
The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
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