ING Says Euro May Find Anchor Near 1.16 as Lira Weakens Ahead of Turkey Rate Decision

06:06 AM EDT, 10/23/2025 (MT Newswires) -- EUR/USD is hovering around 1.160, a level that, in ING's view, can work as an anchor again on Thursday and possibly for a few more days should the United States consumer price index fail to add much to the US dollar (USD) narrative.

The eurozone calendar only includes consumer confidence data -- not market-moving -- on Thursday, and Friday's PMIs may also have limited spillover into foreign exchange, wrote the bank in a note. Next week's European Central Bank meeting will incidentally be a non-event in ING's view.

In the rest of Europe, Scandinavian currencies are performing quite well this week, mostly thanks to their high beta to the recovery in risk sentiment, stated the bank. Incidentally, both Sweden and Norway present a combination of decent growth prospects and low debt that favors rotation into their undervalued currencies in periods of market calm. ING remains generally constructive on Sweden's krona (SEK) and Norway's krone (NOK), even if the short-term picture is more mixed than the medium-term one.

EUR/CZK and EUR/HUF saw only some further side moves this week and the Central and Eastern European region lacks a stronger impulse for movement, added the bank. On the other hand, EUR/PLN surprised with a quick swing down on Wednesday and, without any significant reason, tested levels below 4.225, the lowest levels since April.

Poland's zloty (PLN) erased most of the profit and closed trading again above 4.230 at the end. However, markets show that PLN has some potential, although rates point rather in the opposite direction.

The Central Bank of Turkey (CBT) will decide on another rate cut on Thursday. ING expects a 150bps rate cut to 39%. However, the story is more unclear than usual.

The latest inflation prints surprised to the upside, indicating a slowdown in rate cuts compared with the previous 250bps.

For the currency, the picture remains unchanged and although the lira (TRY) continues its weakening trend, carry continues to sufficiently compensate for losses from long positions, according to ING. Although markets have become accustomed to political noise and USD/TRY isn't easily shaken these days, this Friday the market expects a court hearing regarding the congress of Turkey's opposition CHP party.

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