EUR/USD may rise as Fed's Powell signaled rates are unlikely to rise anytime soon
|- Fed's Powell signaled that rates will likely hold steady.
- Markets may offer US dollar, helping EUR/USD end the four-day losing streak.
- Weak Eurozone data and trade issues may cap upside in EUR/USD.
EUR/USD could snap four-day winning streak as Federal Reserve's (Fed) President Jerome Powell on Monday signaled that interest rates are unlikely to rise anytime soon.
Fed's Powell, while speaking in Providence, Rhode Island, said low inflation expectations feed on themselves and make it tougher for the Fed to support the economy, according to CNBC. The central bank head reiterated commitment to symmetrically and sustainably achieving the 2% inflation objective and will use tools to make sure that there is no unhealthy downward drift in inflation expectations and inflation.
Powell's comments indicate the Fed is likely to hold rates steady for some time unless inflation spikes well above 2 percent.
The markets, therefore, may offer US dollars, helping EUR/USD eke out gains for the first time after Nov. 19. The pair registered marginal losses on Monday to confirm the fourth straight daily drop.
While Powell's comments may weigh over the US dollar, the upside in the common currency looks limited, courtesy of weaker Eurozone and German PMIs released last Friday.
Also, reports stating that the US and China have reached a consensus on solving trade issues have failed to boost risk appetite. This is evident from the flat action in the Chinese yuan and the Australian dollar. The futures on the S&P 500 are also trading in a sideways manner. Put simply, the broader markets are not in favor of big gains in the EUR.
EUR/USD is currently flatlined at 1.1013.
Technical levels
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