U.S. inflation reports and the ECB's interest rate
U.S. will release CPI and PPI data on 14 and 15 March at 12:30 p.m. UTC
The Consumer Price Index (CPI) is a monthly report measuring differences in prices of goods and services consumers buy. Producer Price Index (PPI) shows changes in the price of goods and services producers purchase. Both reports are popular inflation indicators, and inflation is the most important data for the Federal Reserve (Fed) to plan its monetary policy.
CPI and PPI reports will give clues on the outcome of the next Fed's policy meeting on 21–22 March. The market expects inflation to slow only a little, meaning the Fed will have to provide more rate hikes. If reports indicate a substantial slowdown in inflation, it will surprise the market and bring down the U.S. dollar.
The ECB's interest rate decision is due on 16 March at 1:15 p.m. UTC.
The market is firmly sure that the European Central Bank will deliver a 50-basis points (bps) rate hike. If these expectations of a 50-bps hike are met, EURUSD will rise slightly as the rate increase is already priced in. In case the rate hike is smaller than expected, the euro will drop sharply. However, this scenario is highly unlikely to happen.
The Consumer Price Index (CPI) is a monthly report measuring differences in prices of goods and services consumers buy. Producer Price Index (PPI) shows changes in the price of goods and services producers purchase. Both reports are popular inflation indicators, and inflation is the most important data for the Federal Reserve (Fed) to plan its monetary policy.
CPI and PPI reports will give clues on the outcome of the next Fed's policy meeting on 21–22 March. The market expects inflation to slow only a little, meaning the Fed will have to provide more rate hikes. If reports indicate a substantial slowdown in inflation, it will surprise the market and bring down the U.S. dollar.
The ECB's interest rate decision is due on 16 March at 1:15 p.m. UTC.
The market is firmly sure that the European Central Bank will deliver a 50-basis points (bps) rate hike. If these expectations of a 50-bps hike are met, EURUSD will rise slightly as the rate increase is already priced in. In case the rate hike is smaller than expected, the euro will drop sharply. However, this scenario is highly unlikely to happen.