06:20 AM EDT, 07/08/2025 (MT Newswires) -- Reports suggest the European Union might be able to secure a decent trade deal with the United States after all, noted ING.

The EU's negotiating leverage of a community of 450 million consumers is leading to reports that the baseline 10% U.S. tariff on EU imports can be maintained, while there might be some better carve-outs for the aircraft or drinks industries. There are still big challenges with auto tariffs at 25%, and one of the biggest shoes to drop is what happens in the pharma sector, wrote the bank in a note.

EUR/USD initially came lower on the news of tariff letters on Monday -- probably on the view that an equity sell-off was going to cause de-leveraging of short US dollar positions, stated ING. But in the end, the fallout on equities hasn't been severe at all, and investors are probably happy to sit there slightly long EUR/USD.

One story that has caught the bank's eye early Tuesday is a new EU issuance coming to the market later in the day -- potentially looking for 10 billion euros in seven- and 20-year debt. This will be one of four syndicated issuances in the second half.

Tuesday, ING could see some strong headlines in terms of demand or pricing levels for this joint EU offering. And perhaps in quiet summer markets, the bank could even see some direct impact on EUR/USD if a lot of international demand for EU debt goes through to settle this transaction.

EUR/USD consolidation in a 1.1710-1.1830 range looks likely near term.

The current forint (HUF) rally is over, according to ING. EUR/HUF has been rejected several times at 398.5 and on Monday, under risk-off sentiment, returned up near 400. This was the bank's target before.

Romania's central bank (NBR) is likely to leave rates unchanged at 6.50% on Tues day in line with expectations, noted ING. Although the NBR's decision should be a non-event, market attention will be on comments regarding the inflation outlook and fiscal situation.

The latest inflation numbers show some upward pressure, while fiscal consolidation indicates the need to raise some taxes including VAT (sales tax) and excise, raising inflation further.

On the fiscal side, although foreign exchange and bonds have seen some rally after positive headlines, markets seem to have exhausted themselves a bit and the overall story is taking longer than expected, added the bank. In the second half of June, EUR/RON moved from lows of 5.020 to highs of 5.085 and has since moved rather closer to the upper boundary.

EUR/RON now has more freedom than in the past and the deep current account deficit is weighing on the leu (RON). At the same time, the fiscal story is taking too long and those who had positions in bonds or foreign exchange are taking profits, avoiding the risk of any change in direction.

It is hard to read the next direction in foerign exchange but ING expects the upper end of the EUR/RON mentioned range to be tested.