USD/UAH Outlook: Likely to decrease, as the rate is positioned near recent lows and influenced by significant pressures on the US dollar.
Key drivers:
• Rate gap: The Federal Reserve's expected rate cuts toward a neutral stance are making the US dollar less appealing compared to the higher interest rates maintained by Ukraine's National Bank.
• Risk/commodities: The ongoing uncertainty surrounding US government policy and geopolitical tensions, including airstrikes in Venezuela, is contributing to USD weakness.
• One macro factor: An interest-free loan from the European Union aims to support Ukraine's recovery, enhancing confidence in the hryvnia.
Range: USD/UAH is expected to drift within its recent 3-month range, likely staying close to current levels without significant shifts.
What could change it:
• Upside risk: A less aggressive tone from the Federal Reserve in upcoming policy announcements could bolster the US dollar.
• Downside risk: Renewed geopolitical tensions or negative economic data from the US could further pressure the dollar.
