USD/UAH Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and within the mid-range of its three-month fluctuations.
Key drivers:
• Rate gap: The Federal Reserve is projected to conduct rate cuts, while the National Bank of Ukraine maintains higher rates to stabilize its currency, creating pressure on the USD against UAH.
• Risk/commodities: Oil prices are currently stable, which tends to support the UAH as Ukraine's economy relies significantly on energy imports.
• One macro factor: The EU's recent agreement to provide an interest-free loan to Ukraine is boosting investor confidence in the UAH.
Range: The USD/UAH rate is likely to hold within its recent trading range, showing stability without pushing towards extremes.
What could change it:
• Upside risk: An unexpected spike in inflation in the US could trigger renewed dollar strength.
• Downside risk: Any negative developments in Ukraine's economy could lead to depreciation of the UAH against the USD.
