Consumer Price Index is a fixed price measure, consumer basket mainly reflects consumer pays the price of goods and services, is also a kind of measure the level of inflation in percentage change for tools, expressing forms. In the United States the major indexes of the seven points of goods, including: food, wine and drinks house, Dress, Traffic, Medical health, Entertainment, Other goods and services. In the United States, the consumer price index of Labour statistics released by the month, have two kinds of different consumer price index. One is a worker and staff’s consumer price index, referred to as CPW. Second is the city of consumer price index, CPIU referred to.

CPI index is very important, but must be cautious with revelatory, because sometimes released this index rose, the currency market, sometimes the opposite. Because the consumer price index level that consumer purchasing power, also reflects the economic boom, if this index fell, reflecting the recession, the inevitable trend of currency. But if the consumer price index rising, whether a certain positive? Not certain, must see the consumer price index rising “how to”. If the index rose mild, says economic stability upward, of course, its currency, but if this index which tracks are bad influence, because the price index and the ability to buy the expensive price is inversely proportional to the purchasing power of money, the lower of its currency, the inevitable. If considering the influence of interest rate, the indexes of the effect of foreign exchange rate is more complicated. When the country’s consumer price index rising, shows that the country’s rising inflation, which is the buying power of a currency weakens, according to the theory of purchasing-power parity), the country’s currency should go weak. Conversely, when the country’s consumer price index, show the inflation, which is the buying power of a currency rises, according to the theory of purchasing-power parity), the country’s currency should be stronger. But due to the various countries to control inflation for primary task, inflation rising interest rates rise also bring the opportunity, therefore, instead of the good. If inflation under control and also tends to decline, interest rates will decline, instead of the light in this region. Reducing inflation rate policy will lead to “tequila effect”, it is common phenomenon of Latin American countries.