Monthly Foreign Exchange Outlook

The MUFG June 2026 outlook projects a turning point for global FX as potential de-escalation in the Middle East and reopening of the Strait of Hormuz could depress oil prices and weaken the USD. Anticipated rate hikes from the ECB and BoJ are expected to further support the Euro and Yen against a dollar transitioning to a more dovish Fed regime.

Key Takeaways

• 1.A potential deal between the US and Iran to reopen the Strait of Hormuz is the primary binary risk for energy prices and global FX.
• 2.The ECB and BoJ are expected to deliver 25bp interest rate hikes in June, while the Fed is expected to remain on hold.
• 3.The US dollar is forecast to depreciate in H2 2026 as energy prices normalize and the Fed shifts focus toward trimmed mean inflation.

Table of Contents

• Key Events in the Month Ahead
• Majors
• Europe & S Africa
• Asia
• Latam
• Mena
• Forecast rates against the US dollar
• Interest Rate Outlook