The US Bureau of Labor Statistics (BLS) will publish important Consumer Price Index (CPI) data for November on Thursday at 1:30 GMT.
The inflation report will not include October CPI numbers and will not provide monthly CPI printouts for November due to a lack of data collection during the government shutdown. Hence, investors will examine the annual CPI and core CPI prints to assess how inflation dynamics impact the Federal Reserve’s (Fed) policy outlook.
What to expect in the upcoming CPI data report?
As measured by the change in the consumer price index, US inflation is expected to rise at an annual rate of 3.1% in November. Above to say the least September reading 3%. Core CPI inflation, which excludes volatile food and energy categories, is also expected to rise 3% in the period.
TD Securities analysts expect annual inflation to rise at a stronger pace than expected but see core inflation remaining flat. “We look for US CPI to rise 3.2% year-on-year in November – its fastest pace since 2024. The increase will be driven by higher energy prices, as we look for core CPI to remain steady at 3.0%.”
Economic indicator
Consumer price index excluding food and energy (annual)
Inflationary or deflationary trends are measured by periodically collecting the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). Consumer Price Index (CPI) data is compiled on a monthly basis and released by US Department of Labor Statistics. The annual reading compares commodity prices in the reference month with the same month of the previous year. The CPI excluding food and energy excludes the more volatile so-called food and energy components to give a more accurate measure of price pressures. In general, a high reading is considered bullish for the US Dollar (USD), while a low reading is considered bearish.
Read more.
Next release:
Thursday 18 December 2025 at 13:30
repetition:
monthly
consensus:
3%
former:
3%
source:
US Bureau of Labor Statistics
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to this mandate, inflation should be around 2% year-on-year, and it has become the weakest pillar of the central bank’s guidance since the world suffered from the pandemic, which extends to the present day. Price pressures continue to rise amid supply chain issues and bottlenecks, with the Consumer Price Index remaining at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain a strong stance for the foreseeable future.
How could the US CPI report affect the US dollar?
With inflation set to hit in the United States on Thursday, Investors see a roughly 20% chance of a further 25 basis point Fed rate cut in January. According to CME FedWatch.
The Bureau of Labor Statistics’ late official employment report on Tuesday showed that nonfarm payrolls fell by 105,000 in October and rose by 64,000 in November. In addition, the unemployment rate rose to 4.6% from 4.4% in September. These numbers failed to change the market’s pricing of the Fed’s decision in January, as the sharp decline seen in payrolls in October was not surprising, given the government job losses during the shutdown.
In a blog post published late Tuesday, Atlanta Fed President Rafael Bostic argued that the mixed jobs report did not change the policy outlook and added that there are “multiple surveys” indicating higher input costs and that companies are determined to maintain their margins by increasing prices.
A notable increase, at 3.3% or higher, in annual headline CPI inflation could reaffirm the Fed’s policy steadfastness in January and strengthen the US dollar with an immediate reaction. On the flip side, a soft annual inflation reading of 2.8% or lower could push market participants toward a Federal Reserve rate cut in January. In this scenario, the US dollar may come under intense selling pressure with an immediate reaction.
Eren Sengezer, Senior European Session Analyst at FXStreet, provides a brief technical overview of the US Dollar Index (DXY) and explains:
“The near-term technical outlook suggests that the bearish bias remains for the US Dollar Index, but there are signs that downside momentum is being lost. The Relative Strength Index (RSI) on the daily chart is recovering above the 40 area and the US Dollar Index is holding above the 50% Fibonacci retracement of the September-November uptrend.”
“The 100-day SMA lines up as a pivot level at 98.60. If the US Dollar Index rises above this level and confirms it as support, technical sellers may be discouraged. In this scenario, the 38.2% Fibonacci retracement could serve as the next resistance level at 98.85 ahead of the 99.25-99.40 area, where the 200-day SMA and support levels are located. 23.6%.”
“On the downside, the 61.8% Fibonacci retracement level forms a major support level at 98.00 before 97.40 (78.6% Fibonacci retracement) and 97.00 (round level).”
Frequently asked questions about inflation
Inflation measures the rise in the prices of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a monthly (MoM) and yearly (YoY) basis. Core inflation excludes more volatile items such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. Core inflation is the number that economists focus on and is the level targeted by central banks, which are tasked with keeping inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a monthly (MoM) and yearly (YoY) basis. The core CPI is the number targeted by central banks because it excludes volatile food and fuel inputs. When the core CPI rises above 2%, it typically causes interest rates to rise and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually leads to a stronger currency. The opposite is true when inflation falls.
Although it may seem counterintuitive, high inflation in a country causes the value of its currency to rise and vice versa for lower inflation. This is because the central bank will typically raise interest rates to combat rising inflation, which attracts more global capital flows from investors looking for a profitable place to park their money.
Previously, gold was the asset investors turned to during times of high inflation because it maintained its value, and while investors will often continue to buy gold for its safe holdings in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will raise interest rates to combat it. High interest rates are negative for gold because they increase the opportunity cost of holding gold versus interest-bearing assets or putting money in a cash deposit account. On the flip side, lower inflation tends to be positive for gold because it lowers interest rates, making the shiny metal a more viable investment alternative.
