Euro Strengthens Slightly, But Dollar Remains Dominant
The euro exchange rate against the US dollar rose slightly to around US$1.15 per euro on Monday, after previously weakening to a three-month low. This increase occurred amidst the divergent policy direction between the European Central Bank (ECB) and the Federal Reserve (The Fed), which remains a major focus of the foreign exchange market.
From the European side, several ECB officials have begun to signal a more cautious stance and are opening up the possibility of monetary policy easing if inflation continues to decline. Conversely, the US dollar remains resilient after US economic data showed resilience in the labor and consumption sectors, leading market participants to expect the Fed to hold off on lowering interest rates anytime soon.
Analysts believe that as long as this divergence in interest rate policies persists, the US dollar still has the potential to put pressure on the euro in the short term. However, if eurozone economic data begins to show improvement towards the end of the year, the EUR/USD exchange rate could rebound. For now, market participants remain cautious and await clearer signals from the world's two major central banks. (cp)
Source: Newsmaker.id
