The PPI in forex stands for Producer Price Index, which is an economic indicator that measures the average change over time in the prices domestic producers receive for their output. It is a closely watched economic indicator because it provides insights into inflation trends and the overall health of the economy. PPI data represents the monthly change in the average price of a basket of goods purchased by manufacturers. The PPI is released during the second week of each month and is broken down into different categories, such as finished goods, intermediate goods, and crude goods. Forex traders can use PPI as a leading indicator to forecast consumer inflation measured by the Consumer Price Index (CPI) . The PPI is often used as a leading indicator of consumer price inflation, as producers generally pass on increased costs to consumers. If the PPI is rising, it can show that consumer prices may also increase, which can lead to higher interest rates. In turn, higher interest rates can attract more foreign capital, which can strengthen the national currency.