ING Comments on Euro, Denmark's Krone, Poland's Zloty

06:09 AM EST, 02/04/2026 (MT Newswires) -- The last data input before Thursday's European Central Bank policy meeting is Wednesday's eurozone flash consumer price index estimate for January, said ING.

Tuesday's surprise drop in French inflation left little to no mark on foreign exchange, and the bank doubts Wednesday's eurozone-wide figures have much impact potential.

Anyway, expectations are for a slowdown from 1.9% year over year to 1.7%, with core unchanged at 2.3%. Nothing there to trigger a meaningful change of tone by the ECB on Thursday, in ING's view.

EUR/USD has climbed back to 1.183, meaning it's now trading around 0.8% above its short-term fair value in the bank's calculations. If ING is right to think United States data should be relatively good on Wednesday, the bank can see some pressure to trade back below 1.180 in the next couple of days.

The Danish central bank announced on Tuesday that it didn't intervene in the foreign exchange market in January, contradicting what ING and other observers thought. This is good news as it signals that pressure on the krone (DKK) spot wasn't intense enough to break above the 0.2% upper band -- an unofficial one-- from the 7.460 central peg.

The less positive news is that the kind of volatility ING saw in EUR/DKK forward points -- in other words, 12-month jumping from -250 to -200 in the first week of January -- wasn't being exacerbated by a knock-on liquidity effect from spot currency intervention as the bank suspected, but was entirely driven by speculation of higher interest rates in Denmark.

That was directly linked to the Greenland risk, in the bank's assessment.

Anyway, EUR/DKK spot and forwards are back to normal with the Greenland crisis over. Should that risk reignite, ING expects a repeat of those dynamics: contained spot reaction with much more action in forwards, which isn't uncharacteristic of pegged currencies with well-equipped central banks reserve-wise.

The bank's view for EUR/DKK remains neutral, with some upside risks due to the relatively wide rate differential. A return of currency sales via spot intervention -- it last happened in March 2020 -- remains a tangible risk, and a preferable first line of defense before a rate hike.

Poland's central bank (NBP) is likely to leave rates unchanged at 4.00% on Wednesday, stated ING. EUR/PLN has been trading in a very narrow range since the beginning of the year 4.200-230.

If the dovish bias were confirmed, the NBP would cut rates on Wednesday or indicate a willingness to cut rates further, faster and lower than the market expects. The bank predicts a breakthrough of the upper edge of the range, which rates are already indicating at this moment.

As a consequence, ING goes into Wednesday's meeting and Thursday's press conference with a bearish bias on the zloty (PLN).

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