ING Comments on Euro, Sterling, Romania's Leu

06:01 AM EDT, 07/11/2025 (MT Newswires) -- There is still no news on the European Union trade proposal to the United States, but in ING's view, an EU-U.S. trade deal is unlikely to have a "significant" directional impact on EUR/USD, which remains primarily tied to Federal Reserve and US data dynamics.

However, in the absence of major data releases, markets may make some short-term adjustments should details of a draft deal emerge on Friday, wrote the bank in a note. On the European Central Bank front, communication has been quiet, particularly on the topic of euro strength, despite it featuring heavily in Sintra discussions.

French Prime Minister Francois Bayrou called on the ECB to provide more support via looser monetary policy. While this is unlikely to sway the Governing Council directly, it highlights growing unease among European leaders about the risks of keeping rates on hold for too long, especially with a strong euro weighing on exports, stated ING.

EUR/USD briefly dipped as low as 1.1670 on Thursday, and while near-term risks look more balanced, if anything slightly skewed to the downside, the lack of fresh data suggests the pair may remain anchored around 1.170 for now.

Elsewhere on Friday, the United Kingdom May gross domestic product was disappointing, recording a second consecutive fall against consensus expectations of a small rise, noted the bank. The truth is these figures are highly volatile, in part because Q1 was boosted by tariff frontloading and home sales ahead of the Stamp Duty hike in early April.

The Bank of England looked through the spike in Q1 GDP, concluding instead from the broader survey data that underlying activity was more or less flat. Investors will get more color in next Thursday's jobs report, and if things are bad, it would put serious pressure on the BoE to speed things up on rate cuts, added ING.

However, sterling opens unchanged on Friday, suggesting a similar market view.

EUR/RON has been hard to read since the May sell-off, and it seems both the market and the Romanian central bank (NBR) are still looking for the right new level, according to ING. For now, the 5.020-5.080 range seems to be working, but previously, the consensus was expecting to see EUR/RON closer to the lower bound of this range, given NBR's continued efforts to push against inflation.

Still, the bank points out the "massive" current account deficit in Romania, which is naturally making the leu (RON) weaker. Some parts of the market may consider the fiscal story resolved, and closing long bond positions is having a similar effect. So, at the moment, EUR/RON is more likely to stay at the top of this range.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.