The CPI and the Dollar against Other Currencies

Consumer Price IndexMost of the best Forex books often talk about CPI, but are you sure that you know what is it? The Consumer Price Index, also known as CPI, is an indicator that aims to calculate the inflation rate of an economy based on the price of their goods and services. The results this indicator generates can have a big impact on the price of a specific currency when compared to other world’s currencies, which makes savvy investors keep an eye on them as they are released. .

To analyze this data, the CPI uses the regular value of a basket of consumer goods and services, including mobilization, food and energy costs. In order to evaluate the variations in the prices of people’s cost of living, economists use the figures produced by the CPI.

Inflation levels affect directly the interest rates of every country and the prices of their every product as well . When inflation levels are too high, the interest rates are likely to increase as a measure to stabilize market prices; by executing this action, consumers may be prone to put aside money, instead of spend it, because of the interest rate they could receive if the money is left in a bank account. However, if the inflation levels are too low, central banks can reduce the interest rates as a measure to increase economic activities and market transactions overall.

The monthly CPI measure is one of the main indicators checked by traders in the financial markets and highlighted in the best Forex books. When the Bureau of Labor Statistics publishes the CPI figure of the U.S. dollar, the probability of changes in the value of the U.S. dollar in relation to other currencies are very high. Almost sure, since it affects directly the people’s cost of living one way or another.

The importance of CPI to Currency Traders

The CPI indicator is also known as “headline inflation”, and it plays an important role in the currency markets since central banks’ decisions regarding monetary policy are greatly influenced by inflation.

The Central bank’ duties include maintaining inflation at a bearable specific level. The Federal Reserve and the Bank of Japan aims to achieve an annual inflation rate of 2.0%. Policy makers manipulate interest rates accordingly with the goal of making this rate happen. Other mechanisms, such as bond-purchasing agreements and the expansion of the money supply might be suggested and implemented as well in order to meet the end.

Central banks, such as the Federal Reserve, change interest rates if inflation is not within targeted levels, they have the right and even obligation to do it. For example, if inflation is higher than 2.0 %, the Fed may increase interest rates to slow it down. This measure will make the dollar more attractive and strengthen it against other currencies, encouraging saving.

The CPI shows in advance how an economy is doing. If inflation increases at an accelerated rate as Brazil or Venezuela have recently, people will tend to spend more money since their purchasing power is decimated almost daily. Or buying stronger currencies, usually USD or EUR.

People and businesses tend to be less interested in borrowing money from a bank for inventory, services or business growth when a central bank decides to raise interest rates. This factor has an impact on the broader gross domestic product of a nation.

How CPI Data Affects the Dollar on the Forex Market

Now, one of the central bank purposes for this period is to take the economy to full employment, as well as making sure there is a steady and conscious inflation rate during the economy growing process. For this matter, Janet Yellen, Chair of the Board of Governors of the Federal Reserve System, also aims to reach a 2.0% inflation rate on behalf of the Federal Reserve.

As Joe Ross, the creator of best Forex books bestsellers, highlighted: for this reason, many forex traders see inflation and unemployment index as indicators of how the central bank takes its decisions, whether it is to keep, increase or reduce the interest rate levels. Why? Because traders can predict the effects of both the central bank decisions and the behavior of the dollar in relation to other currency pairs and the global economy. When evaluating how an interest rate affects a currency pair, having the CPI nearby definitely gives us a hand when predicting future movements.

Forex traders see the CPI and Core CPI figures are two of the most reliable indicators to predict the behavior of a specific economy. The Core CPI figures is the one that offers more useful information, because of the values it takes into account when evaluating data. For example, when publishing the CPI and Core CPI figures, the Labor Department skips adding to the account the energy and food costs in the Core CPI figures, as their volatility makes them unpredictable over time.

 

The effect of this indicators is not only restricted to monthly reports. Economists actively analyze these figures, since this type of changes can make a lot of difference in the international market on both short and long term trades.

Conclusion

The CPI is an invaluable indicator for the economies and the inflation material, which is a great aid for traders. Both Forex traders and companies highly rely on the changes the CPI figures, because of the benefits that this information brings to the table in order to make accurate predictions.

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How to Effectively Manage Late Payments – and Avoid Cashflow Issues – Once and for All

Late PaymentsYou may have heard it all before – to avoid late payments (and other issues that stem from it, such as a lack of cash or a weak cashflow), you should make sure your clients understand your payment terms from the start and make sure your invoices include all the relevant details so you can eliminate the risk of disputes.

But, needless to say, if late payments are an even bigger issue for you now than ever, there are certain additional things you can do to tackle the issue once and for all. This not only includes sending your invoices way before the due date, offering discounts for early payments, and the solutions mentioned above – this also includes keeping track of your invoices, protecting yourself against a bad debt, and knowing the proper way of asking for or collecting payment.

Keep track of your invoices, especially those from customers who regularly pay late
One of the alternative things you can do to obliterate late payments is to keep track of all your invoices – especially from those customers who have a history of paying late. This means making sure you have confirmed that they have been received by your debtors. What you can do to augment the process is to contact your customer before the date the payment is due just to make certain that there are no questions or disputes and that the payment will still come through. But, if your debtor’s payment has still not arrived on the due date, contact them again on the day itself and remind them about the consequences they can face for late payment.

To help you keep better track of your clients and their debts, make use of software specially-designed for financial management which can help you manage your debtors’ accounts and which you can also use as a central system through which you can make and send out invoices electronically. Additionally, when choosing software, choose one that can list as well as track any invoices that are already past the payment date and that can also do an assessment of which customers regularly pay late.

Protect yourself from a bad debt
If late payments have become an issue that is really affecting your business cashflow, you can protect yourself from these kinds of bad debts by getting trade insurance coverage. This is especially useful if a customer has already gone insolvent and can no longer pay you for your goods or services.

Know how to properly ask for – or chase – payments
If you have done all that you can to get paid – including contacting your customer numerous times – to no avail, then you have no other recourse but to use other modes of collecting payment. The first thing you can do is charge your customer for late payment. You have the right to do this because there is a specific law or legislation that allows businesses to charge penalties for late payment or to charge their customers for the costs of debt recovery. If this method still does not work, then you can ask for help from a debt collection agency. If this does not work, either, then you can think about taking the case to court. This, however, is considered an extreme and worst case scenario as it may end up costing you money and time in the end.

If you are tired of dealing with late payments and have had your cashflow affected more than a few times, you can make use of the cashflow solutions offered by Ultimate Finance (learn more by visiting www.ultimatefinance.co.uk), which include invoice discounting, factoring, asset finance, construction finance, and transport finance, among others.

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What if my PPI provider won’t help?

PPI providerIf you’ve been turned down by your lender, then the next point of call should be the independent consumer complaints organisation: the Financial Ombudsman Service.

It will step in and formally investigate any claim that the loan provider hasn’t resolved, within six to eight weeks. The service is free and they will independently assess the merits of your case and is then the final say on the matter.

Many will be tempted to use a PPI claims management company who will offer to do all the leg work to reclaim your money, but will claim as much as 30% from your refund, which is an exceptionally large amount for something that you can do yourself for free.

What should I say in my complaint letter?

If you’re going it alone, then you will need to draft up a complaint letter. If you’re going to write your own and not use a template, it is important to avoid angry undertones. Instead the focus should clearly and concisely list, why you believe you’re owed.

Include copies of any relevant documentation that supports your claim.

Also ensure that you send your letter by recorded deliver to ensure you’re aware when the bank received the letter, and that they respond within the required eight weeks.

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How Can I Find Out If I Have PPI?

PPIIf you have any paper work for your credit or store card or loan then check these for any additional payments that you could be paying towards PPI. If you don’t have any statements to hand, then contacting the lender, is the best thing to do. Contact the lender is what you should do when you are in the lack of needed statements to hand, that is the most important thing to do.

All of the negativity surrounding PPI means that the providers are aware they need to uphold any valid claims, however it won’t stop many of the lenders initially rejecting the claims.

Who do I contact about my claim?

Going to the provider directly is normally the best course of action, and the easiest way to reclaim your money. In most cases the lender will pay without any real challenge, after all the major banks and lenders have set aside billions to pay back those who were unfairly sold policies.

However if they disagree with your claim and continue to insist that the policy was sold to you fairly then you have the right to dispute the claim and after providing solid evidence they will have to bank down.

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Top reasons why you should definitely start forex trading

forex tradingIt is possible to trade in forex provided you get hold of a good user interface for forex trading. If you are able to make your own search in the best way it would definitely help you to get the right amount of satisfaction out of it. There are many good reasons that you can find when you opt to start forex trading. But at the same time you have to make sure that good efforts are made by you to find a reliable and genuine source that would prove to be very important to you.

  • Invest in small margins: You do not have to worry at all as it does not require a huge amount of money to be invested. This is because one can try to invest in small margins that would not make you get worried about burning a hole in your pocket at all. So this helps you to stay in an advantageous position that does not lead to any worry.
  • Forex market is open 24×7: Yes, forex market is open round the clock every day. So you do not have to get worried at all investing your money anytime. There are also some people who have used forex trading as part time job as it can be traded in the morning, evening or even at night as well without any problem.
  • Get the perfect guidance: It is also possible for you to get the best guidance on how to become successful trading in the best way. Sites like mocaz.com offers with a myriad of tools in providing the perfect guide and help to become a successful trader in the right way. It also makes it possible for clients to AutocopyTrade where experts trade in the best way and that too automatically as well.

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