Release Explanation: CPI measures the average price of a fixed market basket of goods and services purchased by consumers, and therefore give an overall read of Inflationary pressures. “It is the most widely used Inflation indicator of Central Banks, Institutions, and Governments. It is used to calculate Cost of Living numbers for Government programs. Each regional Central Bank will have their own CPI Target,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: The Swiss CPI gained 0.9% in April, much more than the forecasted rate of 0.6%. However, from one year earlier, the CPI stands at only -0.3%, in April, up from -0.4% in March. The last time when the year-over-year CPI was released negative for two consecutive months happened 1998. Inflation is set to continue to decline even more in the coming months, as the huge drop in energy prices and the lower demand should dampen further price increases.
Forex Technical Reaction: The Swissy had a weak reaction to the CPI release. Since the trading day had started, the swissy gained 60 pips near TheLFB R1 (1.1385)