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Yesterday we mentioned the very important geopolitical factor of tensions between the United States and the North Korea, which can cause volatility in US related currency pairs. The tensions continue and safe haven assets such as gold prices continue to rise, while the Japanese Yen also continues to appreciate against the US Dollar as USD/JPY fell for a third consecutive day.

Today the most important economic events which can move the forex market are the following ones:

German Consumer Price Index (July Final)

Time: 06:00 GMT

German Consumer Price Index

The German Consumer Price Index is one of the primary measures of inflation, with higher readings indicating less purchasing power for the consumers, and increased readings of inflationary pressures in German can have a significant effect to the Eurozone inflation as well, as Germany is the largest economy of the Eurozone. The expectation is for an unchanged reading for the month of July, both on a monthly and yearly basis, with readings of 0.4% and 1.7% respectively. Any positive surprise showing a higher than expected reading is positive for the Euro, as inflationary pressures may weigh on the ECB decision to raise interest rates.

US Consumer Price Index (July)

Time: 12:30 GMT

The US Consumer Price Index measures the change in many categories of goods and services, and is a measure of the inflation. The expectation is for a higher reading of 1.8% on yearly basis compared to the previous reading of 1.6%, and also for a higher reading of 0.2% on a monthly basis as well, compared to the previous reading of 0.0%. Any positive surprise with a higher than expected actual readings can be positive for the US Dollar, as they will signal inflationary pressures in the economy, increasing the odds of one more anticipated interest rate hike by the Fed until the end of the year.

US Consumer Price Index Excluding Food & Energy (July)

Time: 12:30 GMT

US Consumer Price Index Excluding Food & Energy

This measure of inflation is more representative about the actual inflation, as it excludes the volatile prices of food and energy. The expectation is for an increase on a monthly basis with a reading of 0.2%, up from the previous reading of 0.1%, but on a yearly basis the expectation is for an unchanged reading of 1.7%. The Fed has a target of inflation about 2.0%, so any positive surprise and higher readings closer to the 2.0%, will be supportive for the US Dollar.

US Real Average Weekly Earnings (July)

Time: 12:30 GMT

US Real Average Weekly Earnings

Higher Real Average Weekly Earnings indicate higher consumer spending and a strong labor market. As consumer spending is very important for the economic growth, higher readings for the Weekly Earnings are positive for the US economy and the US Dollar, with a higher expectation of a GDP growth.

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NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future


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