grtedesco
Forum Newbie
CHY CPI and PPI Release on Monday 14th of October 2013. Last CHY Manufacturing PMI boosted AUD and NZD strongly on 1st September. There was confluence with strong Resistance level at 0.8875 AUDUSD though.
Short keys to CPI:
INFLATION DATA: CPI
The world’s no. 2 economy is expected to show stronger growth in Q3. CHY data may afect AUD on the same level as RBA releases
Short keys to CPI:
INFLATION DATA: CPI
- a. Controlling inflation is generally the primary goal of most G10 Central Banks.
- b. Markets watch price levels very carefully and big deviations from expectation can have immediate reaction on the price.
- c. Since the 2008 credit crisis most of the G-10 central banks have employed a near zero interest rate policy (ZIRP) and inflation rates (with exception of a few spots like UK) have been extremely low as price pressures have been tepid at best. As the global economy recovers and demand picks up that dynamic may change, but for now inflation across most if the G-10 universe remains below the 2% threshold of the central banks and therefore has little impact on currency movements.
- d. There is also a PPI: Producers Price Index
- e. The general dynamics are:
- • Increasing inflation data is usually positive for the currency because it implies a rise in rates
- • Decreasing or cooler data is negative for the currency because it implies a cut in rates.
The world’s no. 2 economy is expected to show stronger growth in Q3. CHY data may afect AUD on the same level as RBA releases