06:15 AM EST, 11/25/2025 (MT Newswires) -- The euro (EUR) is yet to see any real benefit from the Russia-Ukraine peace talks, and is trading at a wide 2% undervaluation versus the US dollar (USD) as of early Tuesday, according to ING's model.

That in't specific to the euro, as the US dollar's overvaluation is similar, if not higher, across G10, wrote the bank in a note.

On the data side, ING had a look at the German Ifo on Monday. The takeaways weren't very positive, as German business sentiment deteriorated in November.

Expectations weakened despite a slight improvement in current conditions, reflecting fading optimism after earlier fiscal stimulus hopes, stated the bank. Underspending in the 2025 budget suggests stimulus may only kick in next year, which offers some hope for 2026.

EUR/CHF may prove to be a more preferred way to play Russia-Ukraine peace hopes, but EUR/USD undervaluation cannot be dismissed, and a return above 1.160 in the near term remains ING's baseline.

EUR/GBP one-week implied volatility is trading three vols above realized, which is the highest relative gap since the 2022 Mini Budget, pointed out the bank. This signals that despite some recovery in back-end gilts, the currency market remains concerned ahead of Wednesday's United Kingdom Budget announcement.

The pair may hold around 0.880 for Tuesday amid a wait-and-see approach, adde ING. That is, unless some Budget anticipations appear in the media and move the market -- a non-negligible risk.