EUR/USD weakened slightly as markets again doubted the chances of aggressive Fed easing. Powell's cautious comments prompted investors to seek refuge in the dollar, especially as global risk sentiment improved somewhat following news of the US-China trade war. Meanwhile, Europe is still awaiting new evidence on inflation and growth before the ECB dares to change its policy tone—as a result, the euro lacks a strong catalyst for a rebound.

From a fundamental perspective, the Fed's "data-dependent" stance makes the dollar's direction sensitive to the next US economic release. If signs of a slowdown become clearer, expectations of easing could revive—good news for the euro. However, if US inflation remains stubbornly stubborn or labor market conditions haven't cooled enough, the dollar has a chance to maintain its advantage. In other words, the euro needs its own positive surprise from Europe, not simply hoping for a weakening dollar. (az)

Source: Newsmaker.id