The current index displays any alterations of import prices and is considered to be an inflationary indicator, which is created only because of changes in currency’s rates. Import prices tend to increase or vise versa when the US dollar’s rate increases.
For instance, goods that cost in Japan 500 yen, taking into account the rate USD/JPY = 100, in the United States the same goods will cost 5$.
In case when t he US dollar’s rate will increase till 110yen, then the dollars’ value of the same production will be 500yen/110 = 4.55$. The decrease of import prices increases competition of imported goods in the domestic market for domestic producers.
As a rule, economists consider the index of import prices (without taking into account oil prices) and export prices (without taking into account prices for agricultural production). Prices for these goods can change from month till month and that’s why the prices may falsify an influence value of currencies’ alteration on the goods value.
Since while calculating the Consumer Price Index the prices for import goods and services are taken into account, the current number will characterize the prices import deposit in retail sales alterations on the “basket” of goods and services. Under conditions of expectation the increase of principal interest rates, its volume increase may lead to the growth of the US dollar’s rate.
In whole, the publication of data of import/export prices exerts a limited influence on the market. Its meaning is monthly published by the Statistics and Economic Analysis Bureau of Commerce Department.
