USD/UAH Outlook: Slightly positive, but likely to move sideways as it is currently above the recent average yet lacks a clear driver.
Key drivers:
• Rate gap: The Federal Reserve's anticipated rate cuts contrast with the National Bank of Ukraine's high policy rate, providing support for the UAH.
• Risk/commodities: Oil prices are currently steady, which generally stabilizes the UAH, given its connection to the energy market.
• One macro factor: The European Union's €90 billion loan agreement aims to enhance Ukraine's economic recovery, promoting stability for the UAH.
Range: USD/UAH is likely to drift within its recent range, showing little volatility as it remains near the recent high end.
What could change it:
• Upside risk: A stronger-than-expected core PCE price index could lead to reduced rate cut expectations, boosting the USD.
• Downside risk: Increased geopolitical tensions or negative economic reports could lead to a drop in the USD against the UAH.
