06:04 AM EDT, 09/19/2025 (MT Newswires) -- ING said it's sticking to its call for EUR/USD to climb back to the 1.1850 handle in the coming days.

Thursday's rally in the pair shows momentum remains tilted to the bullish side, but also that the United States jobs market data continues to have an outsized impact on US dollar (USD) crosses, wrote the bank in a note.

One week after France's debt downgrading, ING concludes that the euro (EUR) spillover has been very contained, despite the OAT-Bund 10y having remained quite wide (currently 80bps), stated ING. The latest political news isn't very encouraging, as the new French prime minister is facing harsh labor union opposition to his fiscal plans, and negotiations with the Socialists -- who are believed to hold the key to passing the budget -- haven't yielded good results so far.

The risk of further widening in the OAT-Bund spreads remains tangible, but what matters most for the euro is the rate of change in those adjustments, and so far, the bank isn't expecting a material currency spillover.

Thursday's labor market data in Poland surprised on the downside, while the zloty (PLN) has been weakening against the EUR for the fourth consecutive day, pointed out ING. On the other hand, comments from the Polish central bank (NBP) in recent days have been rather hawkish, indicating that the market is pricing in too many rate cuts.

As a consequence, the rates market seems confused, and compared with its Central and Eastern European peers, the bank sees basically negligible movements in recent days.

ING recently revised the NBP path forecast to one rate cut in November and two more next year, with a 3.75% terminal rate in 2027. This would indicate that the market is too dovish at the moment and the PLN can expect some support from the rates market, it added.

However, Friday's focus will be on Moody's rating review after the close of trading, where ING expects at least a downgrade in the rating outlook, given that Moody's is one notch higher than other agencies, and the bank has already seen a previous downgrade in the rating outlook from Fitch, following the worse-than-expected budget draft for next year.

As a consequence, investors may see short-term pressure on the weaker PLN, while in the medium term, the currency may see some support from the NBP if it fulfils its comments of only one rate cut this year, according to the bank.