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How is the consumer price index (CPI) calculator helpful in Forex trading?

The CPI calculator enables traders to identify the latest inflation dynamics affecting different currencies across the globe. If the Consumer Price Index calculator for a specific currency shows that intended inflation rates for a currency are consistently and for long periods of time being missed and under what authorities would wish them to be, then the Central Bank issuing the specific currency is likely to reduce its rates or engage in quantitative easing to increase the supply of the specific currency. This will be a signal for a forex investor to sell the currency in question. Moreover, since long term purchasing power parity dynamics indicate that currencies with consistently lower inflation rates are stronger than those with higher inflation rates, the CPI calculator can also be used as an advisor for forex traders’ long-term trades as well, helping them determine which currencies to prefer to stick to and which to avoid.

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