Recently looked at the foreign exchange market situation, the ECB, BOE, and Fed all released hawkish signals almost simultaneously, which is worth paying attention to.

First, let's talk about the euro. Although the European Central Bank has not changed interest rates, it issued a warning about rising inflation, and the market now estimates about a 50% chance of a rate hike in April. The Bank of England also kept interest rates unchanged, but some members hinted at a rate hike in advance, with hawkishness exceeding expectations, and the market's expectation for a rate hike in April has even reached 60%. With both central banks hawkish at the same time, the euro exchange rate is still supported in the short term based on technical forecasts.

But the Federal Reserve is not idle either. Powell also recently sent hawkish signals, and with the recent escalation of Middle East tensions, the market no longer expects the Fed to cut rates this year, but instead is betting on a rate hike in 2026. As a result, although the dollar is impacted by hawkish signals from the ECB and BOE, the overall tone remains relatively strong.

For the euro exchange rate forecast, the key still depends on how the US-Iran conflict develops. If the conflict escalates and oil prices continue to soar, expectations for Fed rate hikes will rise further, the dollar will rebound, and the euro will come under pressure. Conversely, if the situation eases, the euro may have a rebound opportunity. From a technical perspective, EUR/USD is still below the 21-day moving average, with bearish momentum relatively strong, and support is seen at the previous low of 1.139.

The situation with the yen is even more complicated. The Bank of Japan also remains on hold, but the governor hinted that if the economic outlook materializes, they will continue to raise rates. The problem is that Japan heavily relies on energy imports, and a surge in oil prices puts significant pressure on the Japanese economy, directly weakening the BOJ's confidence in raising rates. The market's expectation for a rate hike in April is only 60%, and some analysts believe that a single rate hike alone cannot fundamentally change the yen's depreciation situation. USD/JPY is still above the 21-day moving average; if it breaks through the key level of 160, the next target is around the previous high near 162.