06:20 AM EST, 02/26/2025 (MT Newswires) -- European currencies are taking the Ukraine mineral agreement with the United States as a positive and are finding support in the possibility there will be some kind of U.S. security guarantee included in the deal, said ING.

The details are quite vague, but there have been comparisons to the Lend-Lease agreements signed by President Franklin Roosevelt during World War II in which the U.S. delivered military equipment to Europe in return for strategic military deals -- such as new bases, wrote the bank in a note.

European foreign exchange probably would get a further lift if this deal is parlayed into a full U.S. security guarantee, but that path remains very uncertain after the U.S. foreign policy shift seen over the last month, stated ING.

EUR/USD continues to approach 1.05 and the bank continues to view this as the top of the trading range for the quarter. ING thinks resistance in the 1.0530/50 area can hold and the return to the tariff story next week could drag EUR/USD back to 1.04 and maybe lower.

For Wednesday, the bank notes a slight dip in German consumer confidence for March and is watching a host of consumer and business confidence readings due out across the region over the next couple of days.

It would be good to see EUR/USD trading sub 1.0450 to take a little pressure off the upside, pointed out ING.

The bank thinks sterling can start to underperform through March, but it has to be patient. This week, United Kingdom Prime Minister Keir Starmer will meet U.S. President Donald Trump in Washington, D.C., which will presumably generate some warm headlines after the U.K. committed to increasing defense spending by 2027.

The U.K. is seen as a relative outperformer when it comes to a trade war and EUR/GBP risks are probably still skewed lower in the short term, according to ING.

However, the bank still likes a lower GBP/USD and doubts it will hold onto gains in the high 1.26 area.