USD/UAH Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and lacks clear driving forces to push it further up or down.
Key drivers:
• Rate gap: The U.S. Federal Reserve's anticipated rate cuts contrast with Ukraine's National Bank, which recently raised its interest rate to combat inflation, supporting the hryvnia.
• Risk/commodities: The recent volatility in oil prices is fueling geopolitical tensions that could further pressure the USD.
• One macro factor: Ukraine is set to receive significant international financial support, with the EU providing a €90 billion loan, enhancing confidence in the hryvnia's stability.
Range: The USD/UAH is likely to hold within its recent trading band, showing stability without dramatic shifts.
What could change it:
• Upside risk: A sudden shift in U.S. trade policy that reassures investors could bolster the USD.
• Downside risk: Escalating geopolitical tensions in regions like Iran could weaken the USD further.
