Daily Forex Highlights – Jun 23 – Starmer resigns; GBP under pressure as US banks turn hawkish

📌 What Moves Markets Today

UK Prime Minister Starmer has resigned, triggering a leadership contest. Burnham is running to replace him. Political uncertainty is weighing on sterling. Meanwhile, US banks are turning hawkish. Bank of America now expects three Fed rate hikes this year. Goldman cut its recession forecast. The dollar remains supported.

🔴 Bearish for GBP on political risk.

🟢 Bullish for USD as rate hike expectations build.

🔥 Quick Takes

Dollar

- Former Fed Chairman Greenspan passed away at 100 → A historic figure. No market impact.

- Fed Chair Warsh to testify before the House on July 14 → Markets will watch for policy signals.

- White House NEC director Hassett: Warsh has not asked the White House for advice → A sign of Fed independence. No political interference.

- Goldman: Cut 12-month US recession risk to 15%, from 25% → More confident in the economic outlook. A positive signal.

- Bank of America: Now expects Fed rate hikes in September, October and December 2026, each 25bps. Previously expected no change this year. → A significant hawkish shift. The dollar gets a clear boost.

Pound

- UK PM Starmer announces resignation; Burnham to run for PM → Political uncertainty is rising. Sterling under pressure.

- UK MP Burnham: Asked about calling a general election, said that is "too far ahead" → No immediate election. But uncertainty remains.

Yen

- Finance Minister Katayama: Held online talks with US Treasury Secretary Bessent on global markets and the Iran conflict. The two countries are more aligned on FX policy. → A rare joint signal. Markets are watching.

- Chief Cabinet Secretary Kihara: Will take appropriate measures on FX volatility if needed. No comment on specific levels → Verbal intervention. Markets are on notice.

Other

- Korea finance minister: The current exchange rate is too high → Strong verbal intervention. The won is being defended.

- Korea's 2025 travel deficit with Japan hit a record high → A data point. Not a market driver.

- Malaysia trade minister: Malaysia faces potential 10% tariff risk after July 24 over forced labor concerns → Trade risks are rising. Could impact exports.

💡 Technical Analysis

GBP/USD

The pair is under pressure from political uncertainty following Starmer's resignation. Sterling has been losing ground as markets price in the risk of prolonged instability. Near-term bias remains tilted to the downside. Support is seen near 1.3300, with resistance at 1.3450.

USD/JPY – 161.50

Resistance: 162.00 (psychological), 163.00

Support: 160.60-160.50 (structural pivot), 156.32 (200-day EMA)

The pair is holding steady near 161.50. Intervention risks are keeping traders cautious and the range tight. Technically, last week's break above the previous intervention zone (160.50-160.60) favors the bulls. RSI near 72 is pushing into overbought territory.

MACD remains positive. As long as 160.50 holds, dips are likely to be treated as corrections within the broader uptrend.

🔮 What to Watch This Week

- 🇬🇧 UK leadership race – who will replace Starmer?

- 🇺🇸 Fed Chair Warsh testimony – any policy signals?

- 🇺🇸 BOA's hawkish call – will other banks follow?

- 🇰🇷 Korea FX intervention – verbal or actual?

- 🇺🇸🇯🇵 US-Japan FX alignment – any joint action?