How FX Reacts to CPI Surprises (And How to Prepare)

What people often miss on CPI day is that the number itself isn't what moves the market. The common reaction is to check whether the 3.4% number is high or low. But it's all priced in advance. The real driver of EUR/USD is the gap between the actual number and what the market was positioned for. Even a 3.4% reading can cause the dollar weakness if traders expect higher inflation. And the opposite…