ING Comments on Euro, Swiss Franc, Poland's Zloty

06:06 AM EDT, 10/01/2025 (MT Newswires) -- A speech by European Central Bank President Christine Lagarde was read as mildly dovish on Tuesday, in that the ECB being in a 'good place' didn't prevent it from adjusting interest rates, said ING.

Recent German activity data hasn't come in on the soft side and markets haven't completely ruled out one further ECB cut, note the bank in a note. With that in mind, ING doubts markets will want to drive EUR/USD too much higher on September eurozone inflation of 2.2% year over year, while core was stable at 2.3%.

However, ING thinks the U.S. government shutdown and the softer US dollar (USD) story should dominate on Wednesday and could be enough to drag EUR/USD to 1.1800/1820.

It's been quite a busy week for Swiss news, stated the bank. On Monday, the Swiss central bank (SNB) effectively increased the amount of Swiss franc (CHF) banking deposits exposed to a 0.25bp charge. The press release pitched that as a technical clean-up to last year's adjustment in minimum reserves.

ING wouldn't describe this as a 'stealth' easing of monetary policy, but it will watch what happens to Swiss money market rates when the measure goes into effect on Nov. 1. It is a downside risk to the franc, however.

Late Monday also brought a very rare joint statement from Swiss and U.S. authorities on the use of currency intervention. The SNB statement marketed this as a kind of blessing to use currency intervention as part of its regular monetary policy activities.

The U.S. version of the statement merely focused on the use of intervention to address disorderly or volatile markets. That may be the reason why EUR/CHF hasn't traded much higher on the news. And these releases preceded data which showed SNB currency buying intervention had picked up a little to five billion Swiss francs in Q2.

The bank speculates whether the currency intervention statement has something to do with the pharma deals President Donald Trump is announcing this week. Presumably, the U.S. wants to get the Swiss drugmakers onside as he launches his new 'TrumpRx' website to deliver drugs at discounted rates to US consumers. Pfizer was the first of the big companies to sign up to this on Tuesday. If this reading is right, then, yes, maybe Switzerland does have Washington's blessing for continued currency intervention and can avoid being labelled a currency manipulator.

SNB currency intervention will be passive, however, and the bank forecasts EUR/CHF to continue to trade near 0.92/93 into year-end.

EUR/PLN remains at the top of its current range of 4.240-275, added ING. Although conviction about the Polish central bank's (NBP) next steps isn't high, the bank tends to believe that the zloty (PLN) may see some rebound due to the NBP and the grinding up of EUR/USD.

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