COURSE 1 · FOREX FOUNDATIONS · MARKET EVENTS
CPI and Forex: Why Currencies Move on Inflation Day
The US inflation report comes out once a month at 8:30 a.m. Eastern Time, and currency pairs can move quickly when it lands. Here is what the report measures and why it matters.
By FirstPip editorial team · Updated 2026-10-17 · Educational content · No broker owns this site
Quick answer. The CPI is the US government's monthly measure of consumer price inflation. Currencies react because inflation shapes expectations for Federal Reserve interest rates, which change the appeal of US assets. September 2026 CPI, released October 14, showed prices up 3.7% over the year and core prices up 2.6%.
What did the September 2026 CPI report show?
On October 14, 2026, the US Bureau of Labor Statistics (BLS) published the Consumer Price Index for September 2026. Prices for all items were 3.7% higher than a year earlier and rose 0.6% in the month (seasonally adjusted). Excluding food and energy, the "core" index was up 2.6% over the year.
Energy stood out: the energy index was up 20.4% over the year and gasoline 34.2%, while food at home was up 1.8% and shelter 3.2%. That gap between headline and core is exactly the kind of detail currency traders read closely on release day.
What is the CPI and who publishes it?
The CPI measures the average change over time in the prices that urban consumers pay for a basket of goods and services. The BLS publishes it once a month, at 8:30 a.m. Eastern Time, for the previous month, on dates it sets in advance. The headline number in the news is the change from the same month a year earlier; the monthly change is published alongside it.
Why do currencies react to a CPI release?
Inflation data matters to currencies mainly through interest rates. The Federal Reserve sets US monetary policy to pursue maximum employment and stable prices, and it explains that changes in policy alter the relative attractiveness of US assets, which moves exchange rates. A CPI figure that changes what traders expect the Fed to do can therefore move the dollar against other currencies quickly after the release.
Neither the Fed nor the European Central Bank targets an exchange rate. The Fed's FAQ says the value of the dollar is set in foreign exchange markets and that the Treasury leads US policy on the dollar; the ECB says the exchange rate is not one of its policy targets. Both still watch it, because a stronger or weaker currency changes import prices and so feeds back into inflation. That two-way link is why a currency pair such as EUR/USD or USD/JPY can react sharply to a single US inflation number.
Headline or core: which number matters more?
Both are published at the same moment. Headline CPI includes everything, so it is closer to what households feel at the grocery store and the pump. Core CPI leaves out food and energy, whose prices swing the most, so it shows how prices are moving without the most volatile items. In September 2026 the two told different stories: 3.7% headline against 2.6% core, with energy explaining much of the gap.
This page does not give forecasts or say which way any pair will move after a release.
Is the CPI the Fed's inflation target?
No, and it is a common mix-up. The Federal Open Market Committee's goal is inflation of 2% a year as measured by the price index for personal consumption expenditures (PCE). The CPI is a different index, so a CPI reading is not the same thing as the inflation rate the Fed is aiming at.
What happens to prices around a CPI release?
Major data releases can make prices move quickly. In a fast market, a market order can fill at a worse price than the one you saw on screen; this is called slippage. Plan your stop-loss and position size with that possibility in mind.
None of this means you have to trade the release. Many beginners are better off being flat, or holding only positions sized so that a sudden move stays within their planned loss.
How should a beginner handle CPI day?
- Know when it is. Put the release date and 8:30 a.m. ET time in your calendar and convert it to your time zone with our market hours tool.
- Decide before the number, not after. If you hold a position, decide in advance whether to keep it through the release.
- Size for the worst case you can accept. Use a fixed risk per trade and work out the position with the position size calculator, allowing for slippage.
- Practise on demo. Watching a few releases on a demo account shows you how fast prices can move without risking real money.
When is the next CPI release?
The BLS has scheduled the October 2026 CPI for Tuesday, November 10, 2026, at 8:30 a.m. ET. Release dates are set in advance on the BLS schedule, so you can plan around them weeks ahead. To see how inflation fits with the rest of the forex picture, start with how forex trading works.
Frequently asked questions
What time is the CPI released?
The BLS publishes the CPI at 8:30 a.m. Eastern Time on a date set in advance. The October 2026 report is scheduled for Tuesday, November 10, 2026.
Why does the dollar move on CPI day?
Inflation data changes what traders expect the Federal Reserve to do with interest rates. The Fed explains that policy changes alter the relative attractiveness of US assets, which moves exchange rates.
What is the difference between headline and core CPI?
Headline CPI covers all items. Core CPI excludes food and energy, whose prices swing the most. In September 2026 headline CPI was up 3.7% over the year and core CPI 2.6%.
Is CPI the inflation measure the Fed targets?
No. The Fed's 2% goal is measured with the price index for personal consumption expenditures (PCE). CPI is a different index.
Sources
- U.S. Bureau of Labor Statistics, Consumer Price Index news release, September 2026 (released October 14, 2026)
- Federal Reserve, Monetary Policy: What Are Its Goals? How Does It Work?
- Federal Reserve, FAQ: How does the foreign exchange value of the dollar relate to Federal Reserve policy?
- European Central Bank, Explainer: What is the role of exchange rates?
- FirstPip knowledge base — Order types and slippage (S008)