US CPI figures could guide USD
In the US this week, the consumer price index data for November is due out on Tuesday and is expected to be -0.1% month-on-month (MoM) and 3.1% year-over-year (YoY), down from 0% and 3.2% respectively.
Core CPI is expected to be 0.2% MoM and 4% YoY. Investors will be keeping across US indices and USD crosses following these updates with the USD expected to experience increased volatility this week with the Federal Reserve interest rate decision also on the calendar. If the Fed rhetoric suggests keeping rates higher for longer, US treasury yields are likely to push upwards and will likely be quite bullish for the US dollar.
(AI Video Summary)
Expected CPI figures outlook
This week in the US, there will be an important announcement about how the prices of goods and services have changed. This announcement is called the Consumer Price Index (CPI) data for November. It is expected to show a slight increase in prices compared to the previous month. For example, prices are expected to go up by 0.1% from October to November and by 3.1% compared to the same time last year. This is a little lower than the numbers from the previous month, which were 0% and 3.2% respectively.
There is also something called the Core CPI, which looks at prices without including the cost of food and energy. This is because prices for these things can be very volatile and may not show the full picture of inflation. The Core CPI is expected to rise a little more, with prices going up by 0.2% compared to last month and by 4% compared to last year.
The impact of CPI data
The release of the CPI data is important for investors. They will be keeping a close eye on the US indices (which are like a summary of how the stock market is doing) and the US dollar. This is because the CPI data is likely to affect how the US dollar behaves in the foreign exchange market. The Federal Reserve, which is the central bank of the US, is also going to make a decision about interest rates this week. If they suggest that interest rates will stay high for a long time, this may cause US Treasury yields to go up, which can have a positive impact on the US dollar.
Overall, people in the market are really excited about the release of the CPI data and the Federal Reserve's decision on interest rates. These events have the potential to make a big difference to how the US dollar performs and can also have wider effects on the financial markets.
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