06:19 AM EDT, 10/10/2024 (MT Newswires) -- EUR/USD remains under pressure, ING said, adding that the focus on Thursday will be on the release of the European Central Bank minutes from the Sept. 11-12 meeting when the European Central Bank cut rates by 25bps but provided no forward guidance.

Since then the bank has seen a terrible set of September PMI data across the region and ECB speakers have acknowledged dwindling inflation risks and increasing growth risks. As a consequence, financial markets are now fully pricing 25bps rate cuts in October and December and keeping those EUR:USD swap differentials wide, wrote the bank in a note.

It seems unlikely that Thursday's release of the minutes can scale back expectations for an ECB rate cut next week, stated ING.

EUR/USD remains "soggy," pointed out the bank. Technically it looks like it can break down to the 1.0800 area. However, the bank isn't sure United States short-dated yields will be the trigger since these have come a long way quite quickly.

What would be a trigger is higher energy prices and that's why tension in the Middle East could demand a greater risk premium of the euro, noted ING.

Central and Eastern European (CEE) currencies tried to find some ground on Wednesday for a second day. Poland's zloty (PLN) and Hungary's forint (HUF) continued to post modest gains while the Czech Republic's koruna (CZK) stagnated, added the bank.

Investors will get more on Thursday given the inflation numbers in the region which could turn the market's attention to the local story. Although global risks remain, the market is visibly trying to get over it.

However, global headlines indicating an escalation of the conflict in the Middle East could again be a trigger for a selloff. Otherwise, ING remains slightly bullish on CEE foreign exchange, which should be further supported by high rate differentials, resulting from the recent sell-off in the rates market, according to the bank.

Although EUR/CZK was the only one in the region to remain unchanged on Wednesday, Thursday's inflation numbers could be a welcome boost for the CZK given the central bank's inflation forecast overshoot.