06:09 AM EDT, 08/07/2025 (MT Newswires) -- United States President Donald Trump's optimism on a possible Ukraine-Russia truce is likely feeding into euro strength, which stands in complete opposition to the US dollar on the matter, said ING.

Should a truce become a more tangible prospect, EUR/USD and EUR/CHF are expected to serve as the primary channels for euro appreciation, wrote the bank in a note.

The Swiss franc continues to suffer from deteriorating U.S.-Switzerland trade relations, stated ING. The Swiss resident returned from a Washington D.C. visit on Wednesday without securing improved trade terms, reducing the likelihood of an imminent deal.

Nevertheless, Swiss central bank pricing remains anchored, with less than a 50% implied probability of an additional rate cut following the unexpected tariff-driven rebound in July, pointed out ING. The trigger for a dovish rethink -- and another CHF selloff -- might be the additional burden of larger-than-expected U.S. pharma tariffs, which are currently excluded from the 39% rate applied to Switzerland but expected to be announced next week.

On EUR/USD, the bank's call for Thursday is neutral, but the balance of risks remains tilted to the upside, even beyond 1.170.

The Bank of England is widely expected to continue its recent pattern of quarterly cuts and reduce the Bank rate by 25bps to 4.0% on Thursday, according to ING.

The reaction in sterling (GBP) will be primarily driven by the vote split; and ING expects dissenters on both sides. At least one member (Catherine Mann) should vote for a hold, and might be joined by two more (Huw Pill and Megan Greene), although this isn't the bank's base case. Arch-dove Swati Dhingra should vote for 50bps, with some risks of fellow dove Alan Taylor joining her.

However, ING wouldn't read too much into the vote split, which has little predictive power for future decisions. Policy guidance should incidentally remain untouched, still signalling "gradual" and "careful" easing ahead.

Markets are pricing in the next cut in either November or December. While the risks appear tilted on the dovish side, there isn't enough evidence that the jobs market deterioration is happening at an alarming pace, nor that services inflation is easing. The bank doesn't think the BoE will offer reasons to heavily revise expectations on the dovish side on Thursday.

EUR/GBP may stabilize around 0.87 in the near term, while incoming fiscal decisions by the United Kingdom government in August continue to limit the likelihood of "significant" corrections. ING has a more positive view on sterling against the US dollar, and the potential pricing out of geopolitical risk in Europe bodes well for Cable, which can find its way back to 1.35 into Q4.

The Czech central bank (CNB) still has room to boost hawkishness -- if it wants to -- and to push a stronger koruna (CZK), added ING. Further currency gains here should be slower than before.

Still, the bank remains bullish given the CNB hawkish story, which is unique within the Central and Eastern European region but also globally. If CNB meets ING's hawkish expectations, it could probably test the 24.500 EUR/CZK levels.