US Core Producer Price Index (PPI) and Its Impact on the Forex Market

US Core Producer Price Index (PPI) report

Release Date Core PPI Change (in percentage) Forecast  (in percentage) Previous (in percentage) Market Reaction
12/7/2024 0.4 0.2 0.3 positive
13/6/2024 0.0 0.3 0.5 Negative

US Core Producer Price Index (PPI) monthly

The US Core Producer Price Index (PPI) is an index that measures changes in the price of goods and services sold by producers to primary consumers. This indicator is issued monthly.

  • If the index is released in a higher than expected condition, this means that the core producer prices are rising faster than expected. This may indicate a high rate of inflation in the near future.
  • If the index is released below expectations, this means that basic producer prices are increasing at a slower pace than expected. This may indicate a possible decrease in the rate of inflation in the near future.

Investors and economic analysts are interested in the results of this indicator as it allows them to anticipate changes in the inflation rate in the US economy. The US central bank also uses this data to make monetary policy decisions.

How does the US Core Producer Price Index (PPI) affect the trading of the US dollar in the forex market?

The monthly PPI affects the trading of the US dollar in the forex market in the following ways:

It gives traders an indication of the rate of inflation in the US economy

The higher the indicator than expected, the higher the inflation rate, which may weaken the dollar.

The opposite is true if the indicator is less than expected.

It helps traders weight the dollar buy or sell trades

If the indicator indicates an expected rise in the inflation rate, traders will tend to sell the dollar, and vice versa.

Helps set short-term price targets for the dollar

The higher the index and the expectation of a higher inflation rate, the lower the price of the dollar, and vice versa.

It is used by the US Central Bank in making monetary policy decisions, which affects the value of the dollar in the markets, so it is considered one of the most important indicators that affect the evaluation of the value of the US dollar.

The body responsible for issuing the US Primary Producer Prices (PPI) monthly

The agency responsible for issuing the primary producer price index (PPI) is the US Department of Labor, Bureau of Labor Statistics.

The Labor Statistics Administration collects data every month from thousands of companies producing goods and services in the United States about the prices of their products that they sell to direct buyers.

It then analyzes the data and calculates the core producer price index, and releases the index each month at the end of the following month.

For example, the producer price index for January is released at the end of February.

The issuance of the index by the US Department of Labor aims to provide stakeholders among investors and economic decision makers with accurate data on inflation rates at the producer level.

It is considered one of the most important economic indicators in the United States, as it is used by the US Central Bank in making monetary policy decisions.

The release date of the US Core Producer Price Index (PPI) is monthly

Released monthly, about 13 days after the end of the month

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