Recent forecasts indicate that the USD to UAH exchange rate is under significant pressure, primarily influenced by bearish sentiment surrounding the US dollar due to expected Federal Reserve rate cuts beginning in 2026. Analysts have noted a notable retreat of the USD following a recent consumer price index report that showed inflation easing to 2.7% in November, leading markets to anticipate a dovish shift from the Fed. The weakened USD is further supported by mixed economic data from the US, which reflects slowing growth while maintaining a resilient labor market. This duality presents a somewhat contradictory picture, limiting the extent of dollar depreciation.
In the context of the Ukrainian hryvnia, the National Bank of Ukraine (NBU) has been actively managing a gradual devaluation of the currency, primarily to meet budgetary financing needs in the ongoing wartime conditions. Recent adjustments to Ukraine's GDP growth forecast, which has been revised downwards to 1.9%, also contribute to the uncertainty surrounding the hryvnia's stability. Inflation concerns persist in Ukraine due to ongoing energy crises, although the NBU aims to target a lower inflation rate over the coming years.
Trading data indicates that the USD to UAH has reached a 7-day high around 42.29, which is only slightly above the three-month average of 41.92. The exchange rate has demonstrated a stable trading range of approximately 3.3% between 41.16 and 42.50. Market participants are keenly watching for upcoming inflation prints and further signals from the Fed, which will likely influence both the US dollar’s performance and the hryvnia’s position in the currency market. The outlook suggests a cautious approach, with potential volatility as external factors, including fiscal dynamics and geopolitical stability, continue to play a critical role in shaping these currencies' trajectory.
