The USD to UAH exchange rate has recently shown notable fluctuations, currently trading near its 14-day highs at approximately 41.33 UAH per USD. This positioning is just below the three-month average, having maintained a stable range of 40.88 - 41.88 UAH over the past weeks.
Analysts have indicated that the performance of the USD will increasingly hinge upon Federal Reserve developments and market sentiments about future interest rate cuts. The recent decision by the Fed has prompted speculation that at least two more rate cuts could occur before the end of 2025, creating mixed trading conditions for the dollar. A significant reaction was observed after a larger-than-expected decrease in US initial jobless claims, which temporarily bolstered the dollar amid lingering uncertainty regarding upcoming inflation data and broader trade tensions, particularly with China.
On the other hand, the Ukrainian hryvnia (UAH) is under pressure, with forecasts suggesting a controlled and gradual devaluation in the second half of 2025. Analysts from Dragon Capital project this weakening will coincide with projected declines in inflation, as the National Bank of Ukraine maintains its key policy rate at 15.5% to stabilize the currency and address inflation expectations targeting an eventual reduction to 5%.
The International Capital Ukraine (ICU) has set an ambitious forecast for the hryvnia, predicting it could reach 43.5 UAH/USD by late 2025. This projection is based on expectations of increased external financing, which could help bolster the National Bank's reserves. Additionally, there is noteworthy discourse regarding a potential shift in Ukraine’s currency reference from the USD to the euro, aligning with Ukraine’s geopolitical realignments towards integration with the EU.
Given these multifaceted factors influencing both currencies, the USD to UAH exchange rate is likely to exhibit further volatility, shaped by ongoing fiscal policy adjustments in the US and evolving economic conditions in Ukraine. Currency market participants should remain vigilant as these trends unfold, as they could present cost-saving opportunities in international transactions.
