Issue #2 – February 2026
The purpose of this review is to provide an analysis of the current situation on the Ukrainian currency market and a forecast of the hryvnia exchange rate against key currencies based on the latest data. We analyze current conditions, market dynamics, key influencing factors, and likely scenarios.
Analysis of the current situation on the currency market
International context
At the end of February, global financial markets were waiting for the spring news from the Federal Reserve Committee, which is scheduled to meet on March 17-18 to review the key policy rate. Most analysts are of the opinion that the Fed will keep rates in the range of 3.5-3.75%. However, several key factors will influence the committee’s final decision. The first is the situation on the labor market, and the second is the inflation rate in the United States. So far, it is not clear that the labor market in the United States has improved significantly. Employment data since the summer of 2025 has been relatively weak, and the unemployment rate has been on a moderate upward trend, reaching 4.4% in December 2025. However, the latest report from the Ministry of Labor on the labor market situation in January added to the optimism. It showed that in January, US employers created 130 thousand jobs, and the unemployment rate fell to 4.3%. Job growth was observed in several industries, including healthcare, social assistance, construction, and professional and business services.
As for inflation, according to the U.S. Bureau of Labor Statistics, it fell to 2.4% in January (annualized). Price pressures eased markedly in the energy sector, and prices for used cars and trucks also declined. Annualized core inflation fell to 2.5%, the lowest since March 2021, compared to 2.6% in December, which was in line with expectations.
The EUR/USD pair has experienced several significant fluctuations over the past month, but the dollar still managed to strengthen its position at the end of February. While the month started at 1.1854, the US currency dropped to 1.1918 towards the end of the first ten days of the month, but later the exchange rate movement changed, with the dollar ending the month at around 1.1820, showing a clear upward trend.
At the end of February, currency fluctuations were influenced not only by official reports on the US labor market and inflation and market expectations of the Fed, but also by US President Donald Trump’s speech to the US Congress on February 24. In his speech, Trump praised his economic achievements and criticized the Supreme Court for ruling against his tariff policy. Trump called his tariff decisions a key driver of the “economic turnaround.” In general, analysts do not expect the dollar to experience any sharp declines in the near future, as recent statistics point to good economic prospects, so most are sticking to their forecasts of an unchanged key rate following the Fed Committee meeting in March, which will support the dollar’s position.
In the EU, the macroeconomic situation looks stable, and annual inflation in the euro area fell to 1.7% in January 2026, the lowest level since September 2024. Core inflation fell to 2.2% in January. The eurozone economy grew by 0.3% in the fourth quarter of 2025, quite unexpectedly, despite geopolitical tensions, so the EU economy has been growing for nine consecutive quarters, demonstrating resilience. The highest growth was recorded in Spain, Germany, and France. The European Central Bank has recently raised its GDP forecast for 2026 to 1.2%, and the ECB is unlikely to change interest rates in the near future. Therefore, the euro’s position remains quite stable, as well as the tendency to further strengthen the euro.
Domestic Ukrainian context
In February 2026, the hryvnia depreciated slowly: at the beginning of the month, the official exchange rate was at UAH 42.84/USD, and at the end of the last week of February, it was at UAH 43.20/USD. No sharp movements were noticed, as the National Bank closely monitors the level of demand and constantly intervenes with foreign currency: from the beginning of January 2026 to February 20, the NBU sold $5.72 billion on the market.
In February, the key policy rate remained unchanged at 15%, and the NBU noted that inflation in Ukraine was declining and forecasted inflation of 7.5% at the end of 2026.
The main event of February was the approval by the European Parliament on February 11 of a decision to provide Ukraine with €90 billion in financial support for 2026-2027. These funds will be used to guarantee the continuous functioning of the state budget of Ukraine: $30 billion for budget support and €60 billion for military support. Ukraine should receive the first tranche in the second quarter of 2026. This is a long-term loan that will be financed by the EU’s borrowings on the international capital markets, and the obligations will be secured by the EU’s budget reserve.
It is also important that Ukraine continues to receive international assistance from its partners: in mid-February, it received a $690 million grant from Japan and Canada. These funds were received under the ERA mechanism of the G7 countries. The aid has been transferred to the general fund of the state budget of Ukraine and will be used to finance priority state expenditures, including pension payments and social support programs, including housing and utility subsidies.
Meanwhile, the situation in the energy sector remains one of the key issues affecting the domestic economy in 2026. The government informed that it has started working with the EU on the Winter Energy Plan for 2026-2027. The EU has already agreed on a new package of energy assistance to Ukraine worth €100 million as part of the energy plan, which will be part of the preparations for the next heating season in Ukraine.
US dollar exchange rate: dynamics and analysis
General characteristics of market behavior
In February, the US dollar strengthened on the Ukrainian foreign exchange market. On the interbank market, the exchange rate was at 42.9 UAH/USD at the beginning of the month, and on February 26 it was already at 43.20 UAH/USD.
In February, the cash market experienced devaluation fluctuations that mirrored the exchange rate movements on the interbank foreign exchange market. At the end of February, the buying rate reached a corridor of UAH 42.80-43.10/USD, while the selling rate was in the range of UAH 43.28-43.50/USD. Meanwhile, the spread between the buying and selling rates is gradually decreasing at bank cash desks and exchange offices, amounting to UAH 0.40-0.50 per dollar.
Key factors of influence
– International context. The dollar is strengthening against the euro and is moving away from its peak due to new reports on the US labor market, which show an improvement in employment. The dollar is also encouraged by data on slowing inflation and expectations that the Fed will not make a decision on changing its key policy rate in March.
– Ukraine receives international assistance: in February, the European Parliament approved the allocation of €90 billion in financial support for 2026-2027. The funds will be used to meet the needs of the state budget and to finance military aid.
– The hryvnia devaluation trend is noticeable in the foreign exchange market: the interbank exchange rate has already crossed the UAH 43.2/USD mark, and further movement towards UAH 43.5/USD is likely.
Forecast
– In the short term (1-2 weeks): the basic range is UAH 43.3-43.8 per dollar with a likely tendency to the level of UAH 43.5-43.6 per dollar.
– Medium-term (2-3 months): UAH 43.60-44.60/$. On the international market, the dollar may strengthen situationally as a result of the March decision of the Federal Reserve to keep the base rate unchanged, which will be influenced by updated data on employment and inflation in the United States. In Ukraine, the hryvnia will be under pressure from the high demand for imports of equipment to repair energy infrastructure, which will affect the level of demand on the interbank market. The exchange rate will also be influenced by updated forecasts of international organizations on the duration of the war in Ukraine.
– Long-term (6+ months): hryvnia devaluation trend, target – UAH 43.6-45.05/$.
Euro exchange rate: dynamics and analysis
General characteristics of market behavior
In February, the euro was influenced by fluctuations in the international market, which was reflected in quotes on the Ukrainian market: while the euro started the month at UAH 51.24/€, it fell back to UAH 51.02/€ at the end of February.
In the cash segment, the euro also fell in February. At the beginning of the month, the buying rate for euros in banks and currency exchange offices was 51 UAH/euro, and the selling rate was 51.95 UAH/euro, and at the end of the month, the buying rate was already at 50.5-50.95 UAH/euro, and the selling rate was in the range of 51.25-51.55 UAH/euro.
Key observations
– Exchange rate geometry: The selling rate for cash euros at the end of February 2026 is at the levels of 51.25-51.55 UAH/€. The dynamics of the euro exchange rate in Ukraine in February was significantly influenced by the strengthening of the dollar on the international market.
– Supply and demand: Demand for the euro remained stable in February 2026, but the cash segment saw a weakening of interest in the European currency. The spread between the buy and sell rates in banks is narrowing, amounting to UAH 0.20-0.45 per euro at the end of February.
Key factors of influence
– Global context: The euro is losing ground against the dollar, which is strengthening amid upbeat labor market data and slowing inflation in the United States. Donald Trump’s speech gave markets confidence that the US economy is growing at a faster pace than previously expected.
– Domestic market: the euro is losing ground, which is a result of international currency trends of strengthening the dollar.
– Behavioral factor: In February, the level of demand for euros in Ukraine declined, resulting in a narrowing of the spreads between the two currencies. However, in the long run, the dollar may start losing ground on the international market again, and demand for imported equipment in Ukraine will grow, which is likely to boost demand for the euro in March.
Forecast.
– In the short term (1-2 weeks), the euro will be in the range of UAH 51.05-51.8 per euro on the interbank market.
– In the medium term (2-3 months), the euro will maintain strong positions on the international market due to the stable development of the eurozone economy and expectations of a significant change in the US base rate, as well as due to upcoming changes in the Fed’s leadership, which may shake investors’ faith in the Fed’s independence. In Ukraine, the euro will be primarily influenced by exchange rate movements on the international currency market. The exchange rate target is 51.4-53.8 UAH/€.
– Long-term (6+ months): gradual exchange rate movement of the euro to the range of 54.0-55.0 UAH/€.
Recommendations: dollar or euro – buy, sell, or wait?
USD/UAH
On the international market, the dollar is strengthening due to updated statistics and hopes that the Fed will not revise its key rate in March. However, further prospects for the dollar’s appreciation are not only related to the level of employment in the US and whether inflation will accelerate. Analysts are talking about another aspect: whether the Fed should expect a long pause in its monetary easing policy, or whether it is possible to stop such easing altogether, i.e. whether the key policy rates will be changed in 2026. This is the main uncertainty. ING, for example, speaks of rather high risks for the dollar and assumes that it will decline to 1.22 EUR/USD by the end of the year.
Additional uncertainty factors include Donald Trump’s plans to continue a tough tariff policy and the upcoming US-Iranian negotiations, particularly in the context of Iran’s nuclear program.
Ukraine continues to see a gradual devaluation of the hryvnia, which is under pressure from many factors, including slow economic growth, the labor market crisis, the critical situation in the energy sector, and the need for large volumes of imports. All of this requires the NBU to carefully analyze the situation and regularly support the foreign exchange market with interventions, but there is no objective to maintain the exchange rate, which means further flexibility in terms of supply and demand for currency. The devaluation trend gives investors an impetus to actively buy foreign currency to plan long-term foreign currency savings. As part of a short-term strategy, it is realistic to carry out speculative transactions to sell US dollars. The dollar remains the main currency in the portfolio of foreign exchange savings.
EUR/UAH
Given the temporary depreciation of the euro, it’s time to buy a small amount of this currency to replenish your currency savings. It’s not the time to sell, but it is the time to closely monitor the international currency market and the euro’s movements, especially on the eve of the Fed’s March meeting. Quite strong exchange rate fluctuations could result in a profitable short position and a profitable exit from some of your savings as early as the end of March. The euro remains one of the most liquid assets that should be included in a long-term currency strategy.
Overall strategy
The Federal Reserve has entered a pause in its monetary policy decisions, and the key policy rate remains unchanged for now. The fact that the US has published updated statistics on employment growth and slowing inflation supports analysts’ forecasts that the Fed will decide to keep the rate unchanged in March. However, everything will depend on the new macroeconomic data that the Fed committee members will receive in the first half of March. Unemployment in the United States is unlikely to change critically over the next few weeks, and slowing price growth trends will have a significant impact on the Fed’s monetary decisions. Geopolitical risks associated with both US-Iranian relations and future US-Indian and US-Chinese trade relations may affect the dollar’s fluctuations.
In 2026, Ukraine entered the fifth year of a full-scale war with Russia. Currently, macrofinancial stability is ensured by a sufficient amount of reserves at $57.66 billion. However, there is no optimism about economic development in 2026. According to the European Business Association, businesses have downgraded their forecasts in response to ongoing security, energy, and economic challenges. The latest business survey indicates that 39% of respondents expect a deterioration, compared to 29% last year, and the share of those who believe in improvement has decreased from 32% to 20%. Businesses name three main negative factors: attacks on the energy system, lack of personnel, war and occupation of territories.
Despite the difficult situation in the economy, the NBU does not plan to issue money to finance the budget deficit this year. Nevertheless, the hryvnia will continue to devalue in 2026 through smooth fluctuations and under the influence of a managed flexibility strategy. Investors would be best served by focusing on well-thought-out currency strategies that include investments in dollars and euros.
This material was prepared by analysts of the international multiservice FinTech product platform KYT Group and reflects their expert, analytical professional judgment. The information presented in this review is for informational purposes only and cannot be considered as a recommendation for action.
The Company and its analysts make no representations and assume no liability for any consequences arising from the use of this information. All information is provided “as is” without any further warranty of completeness, obligation to be timely or to be updated or supplemented.
Users of this material should make their own risk assessment and informed decisions based on their own evaluation and analysis of the situation from various available sources that they consider to be sufficiently qualified. We recommend that you consult an independent financial advisor before making any investment decisions.
REFERENCE
KYT Group is an international multiservice marketplace FinTech product platform that provides financial companies with access to services for promoting their services, as well as advertising and consulting services.
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