06:12 AM EST, 11/13/2025 (MT Newswires) -- EUR/USD has been attempting a break above 1.160 and, while ING is bullish on the pair into year-end, the bank admits a decisive move higher may be a bit premature.

Undervaluation has been trimmed to 0.5% in ING's short-term fair value model estimates, and the US dollar (USD) is expensive to sell from a carry perspective.

In the bank's view, some soft United States data is needed before 1.170 becomes a realistic short-term target for EUR/USD. For now, ING expects more range-bound trading.

United Kingdom Q3 growth came in slightly below expectations earlier Thursday: 0.1% quarter over quarter and 1.3% year over year. This complicates the job of Finance Minister Rachel Reeves a bit more ahead of the U.K. Budget, where she'll try to reassure markets with fiscally prudent measures, whilst trying not to dampen growth excessively or stoke up inflation, wrote the bank in a note.

All this is happening in a moment of renewed turmoil in U.K. politics, stated the bank. Markets had initially dismissed reports about leadership challenges to Prime Minister Keir Starmer, but as the noise increased on Wednesday, ING saw EUR/GBP starting to trade higher. The risk premium -- short-term overvaluation -- on the pair has now risen to 1.2%.

A major cabinet reshuffle or even a change of prime minister before the Budget seems unlikely, but with a December Bank of England cut still not fully priced in, the bank isn't too concerned about EUR/GBP strength. After the Budget, markets could see the pair settle around 0.88, but downside risks for sterling (GBP) won't be exhausted in the short term.

Wednesday's Romanian inflation numbers and the central bank (NBR) meeting didn't bring many surprises, according to ING. The good news is that inflation has stabilized just below 10% at 9.8% year over year, as expected, and will likely remain there for several months before investors see the first decline in the middle of next year.

The NBR kept rates unchanged at 6.50% in line with expectations. Given the weakness of the economy, ING estimates the NBR to return to rate cuts in Q2 2026, supported by a stagnant economy.

On Friday, investors will see Romania's GDP numbers and the NBR inflation report, which could say more about how close markets are to these rate cuts. EUR/RON has stabilized around 5.085 and it seems that the NBR has the situation fully under control, and at the same time, the pressure on a weaker leu (RON) has cooled.

ING predicts changes in the level here only in the second half of next year. It's still important to monitor the continuation of consolidation efforts and policies. Another test for the government coalition will be the Bucharest mayoral elections after Nicusor Dan became president.