EURO CPI Forecasting: Analyzing the Impact on EURUSD pair – 1-2-2024



Today’s given signal : https://t.me/calendarsignal/10390


Inflation in the euro area: The Role of Major Components

In the euro area, the headline Harmonized Index of Consumer Prices (HICP) represents the weighted average of various components that contribute to the overall inflation rate. While each component has unique attributes, they all contribute to the headline inflation in varying degrees. The weights assigned to each component in 2023 provide valuable insights into their importance and impact on the headline inflation.

In terms of weights for 2023, services is the largest component, accounting for around 43.5% of household final monetary consumption expenditure in the euro area. This highlights the significant role of services in contributing to the overall inflation. Non-energy industrial goods, on the other hand, account for around 26.3%, highlighting the significance of this component as well.

Food and alcohol & tobacco, along with energy, collectively account for approximately 20% and 10.2%, respectively. However, it is important to note that the combined weight of these three components is less than one third of euro area expenditure. Despite the lower share, they can still have a significant impact on the headline inflation due to their higher susceptibility to price fluctuations. The weights of the main components of the euro area for 2023 are presented in Figure 3. The graph illustrates the relative weights assigned to each major component, with the headline HICP representing 100%. Services, as the largest component, have the highest weight, followed by non-energy industrial goods. Food and alcohol & tobacco, and energy, have relatively lower weights, but still contribute to a significant portion of the headline inflation.



Previous released data results :

On last CPI data (17-1-2023) we predict to BUY EURUSD as for strong CPI Data price was raised.

Check the previous blog : https://blog.forextrade1.com/euro-cpi-forecast-17-01-2024/

Check last given signal : https://t.me/calendarsignal/10230

Performance :


In summary, the main components in the euro area contribute to the headline inflation in differing degrees. Services, non-energy industrial goods, food, alcohol & tobacco, and energy all play a significant role. While the weight of services is relatively large, the importance of non-energy industrial goods cannot be ignored. Food and alcohol & tobacco, and energy, although constituting a smaller share, have the potential to significantly impact the headline inflation due to their higher susceptibility to price fluctuations. By understanding the relative weights assigned to each component, policymakers can gain a comprehensive understanding of the factors that contribute to the overall inflation in the euro area.


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