ING Comments on Euro, Sterling, Poland's Zloty

06:15 AM EST, 03/05/2026 (MT Newswires) -- EUR/USD remains fragile as energy turns bid again amid the Middle East conflict, said ING.

Another soft day for equities on Thursday, where Europe underperforms the United States, could see EUR/USD back at the 1.1530/50 area, wrote the bank in a note. The only positive ING sees on Thursday would be if the U.S. Challenger job cut data surprises on the upside again, and the US dollar (USD) gets hit as concern grows about the US labor market.

There are a few speakers from the European Central Bank on Thursday, including Luis de Guindos, Olli Rehn and Christine Lagarde. High energy prices have seen short-dated yields spike again Thursday -- but this is a global and not just a eurozone phenomenon.

With growth prospects under pressure, the bank predicts EUR/USD staying offered until this energy crisis is resolved.

The US dollar's strength has dominated this week, but sterling (GBP) has outperformed the euro, stated ING. The biggest drop in EUR/GBP came on Tuesday during a broad deleveraging phase in the market.

The bank attributes this sterling outperformance to positioning, where asset managers have been and still are running large net short sterling positions, while at the same time running long euro positions. Equally, the re-pricing at the short end of the interest rate curve as the market prices out Bank of England easing has helped sterling too.

ING is pushing back its forecast of the next BoE rate cut to April from March. But the bank retains two BoE rate cuts this year, which should still mean EUR/GBP trades at 0.88+.

Additionally, sterling looks poorly placed should bond markets come under pressure again, pointed out ING. One scenario here is that high energy prices curtail or reverse monetary easing cycles, populist governments renew energy subsidies and bond markets get hit. This was the scenario in 2022, which prompted the gilt crisis later in the year.

Poland's central bank (NBP) cut rates by 25bps to 3.75% on Wednesday despite the current global volatility. Although the statement highlighted global uncertainties for inflation, markets were hard-pressed to find any signs of hawkishness. The new forecast shows inflation close to the central bank's target in 2028, while gross domestic prodcut growth remains strong.

Still, ING expects Governor Adam Glapinski's press conference on Thursday to be rather hawkish given the uncertain energy prices.

The zloty (PLN) saw some recovery on Wednesday, as did the rest of the region and global markets. Looking at rates after the decision, it seems that the market isn't paying much attention to the NBP's meeting in these conditions. Still, the rate cut is a dovish signal that the NBP isn't afraid of further rate cuts, although ING's terminal rate call to 3.25% may still be at risk.

Markets dismantled one rate cut bet during the global sell-off and the priced in terminal rate has moved to around 3.50%. A hawkish press conference might not have much of an impact on markets, while a dovish side is a risk for markets at the moment.

However, EUR/PLN should still see some downside below 4.260 in an environment of renewed sentiment, unless ING sees a new escalation of the U.S.-Iran conflict.

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