Forex Experts ...Please

[The Jilmart]

7 min EUR CPI (YoY) (Nov) 0.6% 0.5%

"The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR."

Dear Friends im new to this forex trading. above was extracted from Investing.com economic calendar.

What I cannot understand is how increase in inflation caused to appreciate the currency.By theory if country's inflasion is higher their currency should depreciate. Then how this increase in CPI caused to bullish EUR or did i understand the sentence in a wrong way.

Please Help.

 

[DAM40]

BUMP

 

[rudayas]

im not an expert but according to my knowledge, inflation is related to interest rate, higher reading in interest rate attracts foreign investors so currency value goes up.