06:15 AM EDT, 08/18/2025 (MT Newswires) -- European currencies seem to be holding onto recent gains and whatever news come from the United States on Monday, what is welcome is the decline in oil and natural gas prices, wrote ING in a note.

It was the surge in oil and gas prices in the summer of 2022 -- and the negative terms of trade shock to the eurozone -- that sent EUR/USD below parity.

EUR/USD should stay in a 1.1650-1.1750 range through the early part of the week, but could make a run at the 1.1830 should Federal Reserve Jerome Powell prove sufficiently dovish on Friday.

In terms of eurozone inputs this week, the data highlights will be the August flash PMIs on Thursday. The bank will also be looking at Tuesday's release of the June Balance of Payments data to monitor whether international appetite for eurozone assets remained as strong as it did in May. Wednesday sees European Central Bank President Christine Lagarde speaking in Geneva. Financial markets barely price in one further ECB rate cut over the next 12 months, and ING doubts Lagarde will "rock the boat" with her speech.

EUR/GBP is looking more comfortable at the lower end of a 0.8600-0.8700 range, state the bank. Driving that is newfound and credible hawkishness from the Bank of England, which now has the market pricing just 50bps of further easing. This compares to the roughly 125bps easing priced for the Fed through 2026.

Some "sticky" Unite Kingdom inflation for July looks unlikely to alter the market's view of the BoE over the coming days. This should keep GBP/USD bid this week, where a break of 1.3585/3600 could see 1.3680/3700 by the end of the week, it pointed out.

One wild card this week is Fitch's U.K. sovereign rating review after the close this Friday, added ING.

Friday's talks between the U.S. and Russia sent mixed signals for future developments, and it is difficult to predict how the market will react -- especially in the Central and Eastern European (CEE) region, where ING has seen some positive pre-positioning. Betting portals show that probabilities for a ceasefire between Ukraine and Russia this year have fallen since Friday's talks, but are still significantly higher than they were before the talks were announced.

It will be important for CEE currencies to hear about developments in the U.S. on Monday.

Overall, however, ING is inclined to believe that the CEE may be at risk of handing back some of the gains from previous days today, especially the Hungarian forint (HUF). Nevertheless, it is clear that the playing field is very uncertain in the CEE region, and markets will be reluctant to take risks.