FXCM Insights


What Is Inflation?

Inflation is the rate at which the general level of price rises against the purchasing power of a currency.

Inflation, or the increase in price of goods and services, is caused by an increase in the money supply. Inflation measures general trends in price and can have positive effects, including the ability of central banks to control interest rates and encourage investments, but also negative effects, such as uncertainty of future inflation, which can discourage saving. Inflation can be controlled by governments and central banks using monetary policy, fixed exchange rates, price controls and other methods.

Any opinions, news, research, analyses, prices, other information, or links to third-party sites are provided as general market commentary and do not constitute investment advice. FXCM will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.