Daily Forex Highlights – Jun 15 – ECB officials push for more hikes; BOJ expected to raise rates Tuesday

📌 What Moves Markets Today

🇪🇺 ECB officials made it clear this morning that rate hikes are not over. The market has already priced in a move this week. Across the Pacific, 🇯🇵 the BOJ is expected to raise rates on Tuesday. Former officials are even talking about two hikes this year.

🔴 Bearish for the yen in the near term if the BOJ's hike is already priced in. 🟢 Bullish for the euro as ECB signals more tightening ahead.

📊 Key Themes

- ECB: Rates need to go higher. No one is pre-committing to a specific path.

- BOJ: A rate hike is likely on Tuesday. Some expect two more before the year ends.

- UK: Inflation expectations are rising. The BOE is on hold for now, but the risk is tilted toward hikes.

🔥 Quick Takes

Euro

- ECB's Rehn refused to pre-commit to any specific rate path, which suggests the central bank wants to keep its options open. Markets should not expect clear forward guidance anytime soon.

- The Bundesbank now sees Germany growing only 0.5% this year and 0.8% next year, with inflation at 2.9% in 2026 and 2.7% in 2027. In other words, growth is soft and price pressures remain elevated.

- ECB's Kazimir was more direct: the rate hike task is not finished, and the economy is strong enough to absorb higher borrowing costs. More tightening is coming.

- Kazaks added that upside inflation risks are still there. The ECB can move gradually but will act again if needed. He also warned that second-round effects from energy cannot be ruled out. For July, all options remain open.

Pound

- A BOE survey showed that UK public inflation expectations jumped to 4% for the next 12 months, up from 3.2% in February. Long-term expectations also rose, from 3.7% to 3.9%. That is a warning sign for the central bank.

- According to a Reuters poll, UK inflation is now expected to average 3.3% in 2026, up from 3.2% previously. Growth is also expected to be a bit stronger at 1.0%. Most economists still expect the BOE to keep rates at 3.75% this year, but 25 out of 50 see at least one hike, while only 6 expect a cut. The consensus is slowly shifting toward higher rates.

Yen

- Former BOJ chief economist Kamezawa said that the US-Iran peace deal will not change the BOJ's plan to hike twice this year. He expects the bank to raise rates to 1% on Tuesday. Deputy Governor Uchida is likely to reaffirm the bank's commitment to further hikes, but he will probably avoid giving clear signals on timing. A hike this week looks almost certain. The real question is what comes after.

Other

- Indonesia's senior deputy governor said the central bank will strengthen coordination with the government to keep the rupiah stable. He also expressed confidence that the currency will strengthen toward its fundamental level. This is largely verbal intervention for now.

- South Korean officials met with their US counterparts to discuss the won's weakness. Both sides agreed to cooperate, a rare joint statement that suggests authorities are getting serious about stabilizing the currency.

💡 Technical Analysis

EUR/USD – 1.1606

Resistance: 1.1615 (R1) / 1.1625 (R2) / 1.1632 (R3)

Support: 1.1598 (S1) / 1.1591 (S2) / 1.1581 (S3)

The euro has been grinding higher on the back of hawkish comments from ECB officials, but the move has been modest. The RSI sits at 60.6, leaving room before the pair becomes overbought. On the daily chart, the 20-day moving average has crossed above the 50-day, a positive technical signal. A clear break above 1.1620 would open the door to the next resistance zone near 1.1630.

USD/JPY – 160.12

Resistance: 160.17 (R1) / 160.22 (R2) / 160.28 (R3)

Support: 160.06 (S1) / 160.00 (S2) / 159.95 (S3)

The market is pricing in a BOJ rate hike on Tuesday, but the pair has barely reacted. Price action remains stuck near 160.10, a sign of indecision. The RSI is neutral at 48.6. The real mover will be the BOJ's forward guidance. If the bank sounds hawkish, USD/JPY could drop toward 159.50. If the tone is dovish, a move back to 161.00 is likely.

EUR/GBP – 0.8642

Resistance: 0.8638 (R1) / 0.8640 (R2) / 0.8643 (R3)

Support: 0.8633 (S1) / 0.8630 (S2) / 0.8628 (S3)

The pair is trading near the top of its recent range, driven by diverging rate expectations between the ECB and the BOE. The RSI at 64.1 is approaching overbought but not yet flashing a warning sign. Price is holding above all major moving averages. The next leg higher or lower will likely depend on UK inflation data later this week.

🔮 What to Watch This Week

- The BOJ rate decision on Tuesday. A hike to 1% is widely expected, but the focus will be on the bank's forward guidance.

- The ECB's July meeting. More hawkish signals could push the euro higher.

- UK inflation data later this week. Will it confirm the rise in public expectations?

- Any concrete steps from the Korea-US FX cooperation agreement.