Report published May 22, 2026

FX Daily: Iran Fall-Out Coming Home To Roost In EUR/USD (ING Analysis)

ING · May 22, 2026

The EUR/USD is facing a new bearish phase driven by poor European activity data and a hawkish Fed outlook. Meanwhile, political turmoil in Turkey is testing TRY carry positions.

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Finvaulta summarizes ING's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.EUR/USD is entering a new bearish phase as poor European PMIs suggest stagflationary effects from Middle East tensions are impacting activity.
2.Hawkish Fed re-pricing is supporting the USD, with markets now pricing in 20bp of hikes by December.
3.Turkish Lira (TRY) is experiencing volatility and carry-trade pressure following a landmark court ruling removing the main opposition leader.

USD: Look out for a Waller speech at 4:00pm CET
EUR: Activity is the weak link
CHF: EUR/CHF hostage to the ECB
TRY: Political uncertainty tests carry positioning
Author

Report data

Bearish phase for EUR/USD

Metric	Estimate	Context
Fed Hikes Priced	20 bp	Market re-pricing of the Fed cycle.
ECB Tightening Priced	65 bp	Down from 85bp in late April.
TRY 1m Implied Yields	50%	Spike from 35% following court ruling.
CBT FX Reserves	169 USD Billion	Strong position despite intervention.

Source: ING; Central Bank of Turkey. This is a dated model snapshot, not a live forecast.

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Authors / Editors

Chris Turner · Global Head of Markets and Regional Head of Research for UK & CEEFrantisek Taborsky · EMEA FX & FI StrategistFrancesco Pesole · FX Strategist