BUZZ-COMMENT-Tariffs, Powell may fall down list of EUR/USD priorities

Feb 11 (Reuters) - EUR/USD's ability to trade near the midpoint of its broader 1.0150-1.0550 range, in place since December, suggests investors may be shifting attention away from tariff and Fed risk and toward U.S. inflation and sales data to determine the next move.

The dollar's gains following U.S. President Donald Trump's decision to raise tariffs on aluminum and steel have already evaporated despite higher U.S. yields US2YT=RR, and Fed Chair Powell's semiannual testimony to congress offered no fresh motivation for greenback bulls as he reiterated the message from his January FOMC meeting.

That leaves U.S. January CPI, due on Wednesday, PPI on Thursday and retails sales Friday, with the inflation data likely to have a greater impact.

U.S. 2-year nL1N3P20IY and 5-year USBEI5Y=RR break even inflation rates have rallied to their highest in two years, indicating that investors are focused on the risk of elevated price growth.

The U.S. dollar and break evens are typically positively correlated, though that link broke down over the past month. If that correlation were to reestablish itself, the dollar could rally to make up lost ground.

If inflation indicators and retail sales were to come in above estimates, investors might increase bets on the Fed ending its easing cycle and possibly begin discounting the possibility of rate hikes.

That could increase the dollar's yield advantage over the euro as yield spreads US2DE2=RR and terminal rate spreads for the Fed SRAM26 and ECB FEIZ5 widen, potentially opening the way for EUR/USD to fall towards parity.

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