CPI data showed higher-than-expected US inflation


The Consumer Price Index (CPI) for August 2023, whose data was released on Wednesday, September 13, 2023, rose by 0.6%, its biggest monthly gain in 2023. The inflation measure rose by 3, 7% from a year earlier and core CPI rose 0.3% and 4.3% versus estimates of 0.2% and 4.3%. Energy prices contributed to a large increase in the CPI Index values, as they increased by 5.6% month-on-month, an increase that mainly included a 10.6 percent increase in gasoline prices. The jump in headline inflation also hit employee paychecks, with real average hourly earnings in the U.S. falling half a percent for the month.

Not only on the basis of these facts resulting from the data of the CPI Index, the number of financial strategists, analysts of brokerage companies and in general all participants of the financial markets who are convinced that the central bankers of the United States of America at their FOMC FED (Federal Open Market Committee Federal Reserve System) meeting has increased ), which will traditionally take place as a two-day event on September 19-20, 2023, will increase interest rates precisely in view of the current state of core inflation in the USA. Representatives of the central bank of the United States FED, as members of the FOMC, focus more on the so-called core, or core inflation, because it provides a better idea of where inflation is headed in the long term. It is this view of central bankers that is known, and that is how investors reacted to the published data of the CPI Index, which was currently manifested in the foreign exchange market by a change in the trading trend in relation to the American dollar (USD), whose exchange value fell.

Currently, during the European morning of Thursday, September 14, 2023, at approximately 8:22 CET, the exchange value of the American dollar (USD), measured by the dollar index DXY (US Dollar Currency Index), was at a point level of 104.62 USD points with a daily drop of -0.14% point value according to this index, which compares the value of the USD against the other six major world currencies. However, according to the statements of economic correspondents in connection with the analysts of brokerage companies, the exchange value of the USD still shows its high value, and we can thus speak of a still so-called “strong dollar”. According to technical analysis data, it follows that the USD exchange value measured by the DXY dollar index has strengthened by 1.08% of its point value according to this index since the beginning of this year 2023. The current change in the trade trend of the USD, in the form of a drop in the exchange value, thus helped the current growth of the single European currency, the euro (EUR), against the USD within the forex operations of the foreign exchange market.

On the indicated day and time, this global currency pair of the single European currency Euro (EUR) and the US dollar as the world reserve currency was traded in the forex operations of the foreign exchange market at a mutual exchange rate value of 1.074 USD per EUR with a daily strengthening of the EUR by + 0 .15% exchange rate against USD. However, according to the financial strategists of the foreign exchange market, further higher volatility of this currency pair can be assumed, taking into account the meeting of the Board of Governors of the European Central Bank (ECB) on Thursday 14 September 2023, when the decision to change interest rates in the euro zone can significantly affect the current exchange rate of this EUR/USD currency pair. Likewise, further influence on the mutual exchange rate of this so-called global currency pair, when trading of this currency pair makes up more than half of all forex market trades, can be expected after the meeting of the central bank of the USA Federal Reserve System, which will announce its decision on interest rates on Wednesday, September 20, 2023 rates.