06:14 AM EST, 11/11/2025 (MT Newswires) -- EUR/USD remains around 1% undervalued according to ING's short-term fair value model.

That shows that the rally in the US dollar (US) -- net of last week's correction -- has still exceeded what can be justified by market drivers like rates and equity differentials, wrote the bank in a note. However, the euro (EUR) is lacking bullish thrust and a potential end to the Unite States government shutdown isn't a clear-cut USD negative.

Tuesday's eurozone calendar includes the ZEW surveys in Germany.

ING continues to look at 1.150 as a floor and sees room for stabilization close to 1.160 based on the bank's short-term valuation indicators, but the probability of a major revamp in depressed EUR/USD volatility remains low this week.

Tuesday's United Kingdom jobs numbers came in on the "soft side," according to ING. Unemployment rose to 5.0% in the three months to September (expectations were for 4.9%) and October's employment contracted by -32,000, following a revised -32,000 (first print was -10,000) for September. Weekly earnings slowed across the board, with the headline (three-month/year-over-year) measure undershooting expectations at 4.8%.

These aren't "screamingly" dovish figures, but they do endorse to some extent the ongoing dovish repricing of Bank of England rate expectations, stated the bank. Part of the Bank of England's hawkish pivot in the summer was based on downplaying risks to the labor market while refocusing on inflation issues.

Now, both inflation and jobs data are starting to point down, and ING thinks the Fall Budget's tax hikes will provide the final argument for a cut in December.

EUR/GBP continues to face some upside risks as markets aren't fully pricing in a December move (18bps early Tuesday), added the bank. However, the pair is already trading on the rich side as sterling (GBP) embeds some risk premium ahead of the budget. ING's year-end target remains 0.88.

Foreign exchange saw a positive opening on Monday with a return of risk-on sentiment to global markets. Hungary's forint (HUF) in particular is benefiting from the political outcome of the President Donald Trump and Prime Minister Viktor Orban talks.

Inflation prints in Hungary and the Czech Republic shouldn't paint a significantly different picture on Tuesday and the Central and Eastern European market should continue to enjoy favorable conditions, noted ING.

On the other hand, HUF rates saw some rally in response to the weekend headlines and the interest rate differential saw some narrowing. At the same time, the currency outperformed the region on Monday and EUR/HUF saw new lows below 394.

As a consequence, it seems to that the HUF rally is too fast and although conditions remain positive, the bank may see some correction of Monday's gains.