07:14 AM EDT, 08/22/2025 (MT Newswires) -- EUR/USD is edging lower, driven both by the US dollar (USD) and fading prospects of any near-term improvement in the Russia-Ukraine war, said ING.

On the eurozone calendar on Friday is the negotiated wage number for Q2. At its peak last year, this was running at 5.4% year-on-year and was clearly worrying the European Central Bank about second-round effects from high inflation, wrote the bank in a note. This had dropped to 2.4% in Q1, and another softer number on Friday would no doubt be welcomed by the ECB.

That said, the market has completely priced out any easing from the ECB this year, and ING will need to see some sharp deterioration in the hard data to put that back on the agenda.

Elsewhere, the European Union and the United States put some more flesh on the bones of a trade deal on Thursday. The EU would like to move on, but there still seems to be some uncertainty as to whether pharma and semiconductor tariffs will be capped at 15% or whether U.S. Section 232 investigations could result in higher tariffs after all.

For Friday, Federal Reserve Chair Jerome Powell's tone will determine whether EUR/USD has to trade all the way back to the 1.1500/1520 area, which is the outside risk should he manage to swing market pricing back to 50:50 for a restart to the Fed easing cycle in September, stated ING.

EUR/CHF is comfortably trading under 0.94 again as optimism over a Russia-Ukraine ceasefire fades, pointed out the bank. As with ECB pricing, expectations of a Swiss central bank rate cut in September have faded, and investors now struggle to see the SNB taking rates negative at all.

In terms of ING's currency views, the bank sees little change in its view published in early July that the strong Swiss franc (CHF) creates a big headache for the SNB -- but there's little the central bank can do about it.

ING sees no reason to change its view that EUR/CHF can continue to trade down at these 0.93 levels for a while longer.