Inflation measures how fast the general price level is rising. Central banks raise interest rates to cool high inflation and cut them when it is low, so inflation data such as CPI strongly moves currencies. Traders watch these releases as key fundamental events.
Forex Term
Inflation
The rate at which prices rise, shaping central-bank policy.
Example
A hotter-than-expected inflation report can lift a currency on rate-hike bets.
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Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.