06:09 AM EDT, 05/23/2025 (MT Newswires) -- The release on Thursday of European Central Bank minutes and ECB commentary seems to squarely point to a 25bps ECB rate cut in June, said ING.

That would take the deposit rate to 2.00%. That's fully priced by the markets, as is a further 25bps rate cut in December, wrote the bank in a note.

Thursday's flash PMI data for May appears to support that pricing, with some worrying declines in the services component. Here, it clearly looks as though uncertainty is weighing on activity, and there will be much focus on European Union-United States trade negotiations, which should pick up steam next month, stated ING.

The bank thinks the euro is continuing to benefit from being the most liquid alternative to the US dollar.

There is also evidence that portfolio re-allocation is helping the euro, pointed out ING. Earlier this week, March eurozone Balance of Payments data showed that eurozone residents repatriated 40 billion euros of international equity positions in March -- the largest inflow since September 2022. The equity portfolio flow account looks pretty "healthy" for the euro right now.

For Friday, ING is focusing on two things on the eurozone calendar. ECB Chief Economist, Philip Lane, speaks in Florence and the bank is interested on what he has to say about disinflation.

Later Friday, there's the latest update from the ECB on negotiated wages. The last ECB negotiated wage tracker, released in April, pointed to wage growth at 4.8% in 2024 and 3.1% in 2025. Any drop in the 2025 figure could be a "very mild" EUR/USD negative Friday, added the bank.

The bank expects EUR/USD to trade well within a 1.1280-1.1380 range on Friday.