06:23 AM EDT, 07/29/2025 (MT Newswires) -- Investors early on Monday focused on how the United States-European Union trade deal would remove uncertainty and allow EU businesses to move on, ING said.

By the end of Monday, investors seemed to have concluded, as did some EU leaders, that, net-net, universal tariffs were going to hurt, wrote the bank in a note. When the dust settles, the fact that the pharma and semiconductor sectors have been included at the 15% tariff rate -- even after trade investigations are released -- will probably be seen as a good thing.

The EU will just have to make the best of it -- focusing heavily on domestic demand for a change, stated ING.

For Tuesday, investors get the first of the Q2 gross domestic product releases for the eurozone countries. Wednesday is the main event, however, where eurozone growth as a bloc is seen falling to flat quarter-over-quarter from 0.6% in Q1, pointed out the bank.

EUR/USD price action remains "very poor," according to ING. And if it can't rally above 1.1600/1625 on any good news on Tuesday, it could well take out support -- both at 1.1555 and 1.1500.

Markets saw a huge move lower in EUR/GBP on Monday, added ING. It could be seen as the United Kingdom having a better deal than the EU when it comes to trade. In reality, however, it was probably all to do with positioning, where opposing fiscal and monetary prospects between the eurozone and the U.K. had made long EUR/GBP one of the conviction trades this summer.

That clear-out may have run its course and the fact that GBP/USD has now broken under 1.3370 support suggests sterling (GBP) can sell off alongside the euro (EUR). There is a technical case now for GBP/USD to trade down to the 1.3150 area, noted the bank.

That is ING's preference in a week where it thinks the event risks are skewed to the positive for the US dollar (USD).

Early Monday's optimism in Europe reverted to a risk-off mood, and along with the EUR collapse, ING also saw pressure on the Central and Eastern European (CEE) currencies. The weaker EUR exposed the weakness the bank has been pointing to for some time, with the main focus on EUR/PLN, which jumped above 4.265 on Monday, the highest level since mid-July.

The tightening rate differential has been pointing to levels around 4.280 for some time. Arguably, the summer's low liquidity kept Poland's zloty (PLN) stronger despite weaker economic data, supporting a rather faster cutting cycle at Poland's central bank.

On the other hand, Monday's nudge from the EUR side doesn't mean the gap will close completely and investors may see some drift lower in EUR/PLN after the biggest one-day move higher since early June, accompanied by a strong sell-off in Polish equities as well. Whatever the case, ING expects EUR/PLN to still have room to go higher later. In particular, Thursday's inflation may be another trigger for pressure on the PLN.

Elsewhere in the CEE region, the pressure on weaker foreign exchange has been milder with EUR/CZK almost unchanged and some correction in Hungary's forint (HUF) gains from previous days, said the bank.

The Czech Republic's koruna (CZK) should see support from hawkish Czech central bank comments this week and any delayed spike in EUR/CZK should be met with decent selling interest.