06:26 AM EDT, 06/19/2025 (MT Newswires) -- ING said its view is that EUR/USD can probably correct a bit further from here on geopolitical risks.

The bank's near-term target is 1.140, and explorations below that level can be justified even without new big spikes in oil prices.

That said, geopolitical events tend to be temporary drivers for foreign exchange unless they trigger long-lasting effects on commodity prices -- like the Russia-Ukraine war, stated ING. So, the bank still thinks there will be plenty of interest in buying the EUR/USD dips at the first signs of de-escalation.

Aside from speeches by European Central Bank President Christine Lagarde and other Governing Council members on Thursday, the eurozone calendar is empty.

The Bank of England will almost certainly keep rates on hold on Thursday, in line with consensus and market pricing, pointed out ING. There could be more than one dissenter voting for a cut, but the overall guidance should remain broadly unchanged, roughly endorsing market expectations for two more cuts by year-end.

The risks are, however, slightly on the dovish side given the recent slew of soft United Kingdom data, and ING remains bullish on EUR/GBP in the near term.

If the conflict escalates and keeps impacting energy prices, the bank sees more room to pay front-end rates in Hungary's forint (HUF) and Czech Republic's koruna (CZK) despite the current high levels.

For foreign exchange, this implies an attractive risk-reward, added ING. Although further escalation may initially lead to a risk-off mood and weakening of emerging market currencies, including the Central and Eastern European (CEE) region, higher inflation and hawkish central banks could eventually drive foreign exchange to stronger levels.

On the other hand, Poland's zloty (PLN) seems more isolated due to the strong local story, according to the bank. In addition, PLN has underperformed CEE peers in recent weeks and should be more resistant. At the same time, higher rates due to a hawkish central bank point to EUR/PLN below 4.240.