Issue No. 2 – July 2026
In the second half of July, the hryvnia was losing ground, but the NBU tried to participate in trading as much as possible and stem the national currency’s downward drift. As a result, as of July 31, the official exchange rate was 44.69 UAH/USD, whereas at the beginning of the month it stood at 44.79 UAH/USD. The strengthening of the national currency occurred only at the end of the month; over the last two weeks of July, fluctuations toward devaluation prevailed.
High demand for foreign currency persists in Ukraine for the second consecutive month. As a reminder, in June, according to official data, the National Bank sold $5.087 billion through interventions. This is the highest figure in 2026. The July figure is expected to be lower than the previous month’s “record.” However, it is already obvious that the hopes voiced by many analysts for a summer surge in agricultural exports—and along with it, higher inflows of foreign currency revenue that would support the hryvnia—did not materialize. Throughout July, Russia intensified missile and drone attacks targeting Ukrainian seaports, significantly constraining maritime shipments of agricultural products.
The Federal Reserve System (Fed) Committee meeting, to whose outcome traders’ attention had been pinned over the last month, took place on July 29. Following the meeting, it became known that the Fed left its benchmark interest rate unchanged, but left open the possibility of a future hike if inflation remains high. The statement notes that inflation in the US remains elevated, partly reflecting supply shocks that drove up prices in certain sectors, including energy. It is also known that the sharp rise in fuel prices caused by the US-Iran conflict pushed the annual inflation rate in the US up to 4.2% in May—the highest level in over three years. Since then, oil and gas prices have eased somewhat, but the resumption of hostilities in and around the Strait of Hormuz in late July raises concerns that fuel prices could remain elevated in the coming months. Nevertheless, high rates can drag on labor market growth; in this case, the Fed opted in favor of the labor market, effectively ignoring price increases.
The dollar reacted to the announcement of baseline rate stability by weakening against the euro—on July 30, the rate returned to 1.1450 USD/EUR and later reached 1.1475 USD/EUR, even though on the eve of the meeting, the currency pair was trading at approximately 1.1360 USD/EUR.
During July, demand for foreign currency shifted: while it dropped slightly at the start of the month, it picked up again later, forcing the NBU to scale up currency sales via interbank interventions. Thus, while the National Bank sold $871.2 million to importers during the first week, it sold $2.088 billion over the following two weeks. There is no additional support for the hryvnia from exporters: the export situation remains extremely challenging, especially given Russia’s frequent attacks on domestic seaports and port infrastructure. This affects not only agricultural exports, but also revenue for metallurgical enterprises. However, support for the national currency is coming from the international market, where the dollar managed to strengthen against the euro in July.
Based on July’s results, a decline in international reserves compared to June is possible, as reserves expand mainly through inflows from partners. However, new arrivals were scarce in July. It is known that this month Ukraine received a tranche of around $690 million from the IMF under the new four-year Extended Fund Facility (EFF) program. This program provides for credit assistance totaling approximately $2.2 billion. Funds received under the first tranche will be directed toward funding priority expenditures and ensuring macro-financial stability amid full-scale war.
Regarding EU aid, in late July the Council of the EU agreed on the updated Ukraine Plan under the Ukraine Facility. Media reports indicate this involves €10 billion, which Ukraine can access only under specific conditions—the document contains 27 indicators, ten of which require the passage of new laws. The updated plan also revises 34 out of 146 existing program implementation steps, pushing back deadlines for 12 reforms that require more time. Among the new reforms, special emphasis is placed on the rule of law, anti-corruption efforts, reforms necessary for Ukraine’s EU accession, the energy sector, and further integration into the EU internal market. The updated Ukraine Plan has already approved additional funding for Ukraine in 2026—namely €8.3 billion to be provided through the Ukraine Support Loan mechanism.
The new government in Ukraine, which is just beginning its work under new Prime Minister Serhiy Koretskyi, has not yet released precise data regarding its action plan. However, it is known that the Government Action Program should be submitted to the Verkhovna Rada in August. This will serve as an official benchmark for the specific measures the new Cabinet intends to implement and the economic and financial reforms planned for Ukraine in the near term.
The devaluation of the hryvnia continues; while the hryvnia managed to gain a bit of ground in the first half of July, devaluation became the defining feature in the second half of the month. At the beginning of July, the official exchange rate stood at 44.79 UAH/USD, and on July 29, the NBU rate reached 44.88 UAH/USD. On the interbank market in the final days of July, trading took place at 44.74–44.89 UAH/USD. Importers’ bids are satisfied by the National Bank as the primary currency seller. On the last day of July, the hryvnia strengthened—the official rate reached 44.69 UAH/USD. On the cash market, following the interbank trend, the rate strengthened as well: at banks and exchange booths, the buy rate hovered around 44.35–44.7 UAH/USD, while the sell rate was 44.95–45.10 UAH/USD. Spreads in July remained nearly unchanged, staying within 0.4–0.7 UAH/USD.
Surge in USD demand on the interbank foreign exchange market, though devaluation remains barely noticeable. The NBU acts as the main market maker, holding the hryvnia back from sliding past 44.97 UAH/USD via interventions.
Slow and minor fluctuations in the cash market. Throughout July, the rate at bank counters and exchange offices averaged between 44.95 and 45.10 UAH/USD.
International factors: The US-Iran conflict is in an acute phase, the Strait of Hormuz is blocked, and the US has imposed sanctions on two Iranian companies participating in a scheme where Iran forces vessels to purchase “insurance” to pass through the Strait of Hormuz. Analysts project that Middle East hostilities will persist for several more months.
Behavioral market expectations: After the Fed left rates unchanged in late July, investors are anticipating the Fed Committee’s autumn meetings, where a benchmark rate hike decision could be made. In Ukraine, the primary focus is on the security situation, winter preparations, and financial aid agreements with partners. Decisions and draft laws from the new government will also play an important role in outlining fiscal and tax factors capable of impacting future financial decisions.
Short-term (1–2 weeks): Baseline range of 44.95–45.20 UAH/USD; the hryvnia will lean toward the upper bound, while the NBU will attempt to pull the rate back into the 44.80–44.88 UAH/USD corridor.
Medium-term (2–3 months): 45.15–45.40 UAH/USD. Clear certainty regarding the Fed benchmark rate level and new agreements between the US and Iran could favor a stronger dollar, which would positively impact the hryvnia.
Long-term (6+ months): Under the baseline scenario, the main devaluation trend persists, and the exchange rate could hit 46.50 UAH/USD by year-end. However, beyond the war in Ukraine and Russia’s intensified missile and drone strikes on infrastructure, the key driver will be partner inflows, which directly affect international reserves and the NBU’s ability to satisfy importer demand via interventions.
Throughout July, the euro exchange rate on the domestic market remained nearly static, with very minor fluctuations. However, everything changed the day after the Fed Committee meeting—the euro began losing ground globally, and in Ukraine, the official euro rate reached 51.27 UAH/EUR on July 31.
In Ukraine’s cash market, euro exchange rate stability was maintained in July. However, new euro horizons are motivating retail sellers to adjust their rates. As of July 31, the buy rate sits in the 50.56–51.10 UAH/EUR corridor, while the sell rate is 51.50–51.85 UAH/EUR. Spreads between buying and selling rates narrowed slightly toward month-end to a range of 0.45–0.80 UAH/EUR.
The dollar is regaining ground against the euro internationally. The euro began to decline following the US Fed Committee’s decision to hold benchmark rates steady.
The ECB made no changes to benchmark rates in July. The level of uncertainty in the EU remains high, and the full impact of the energy shock on inflation has not yet fully fed through into the economy. The ECB is monitoring the intensity and duration of this impact, as well as its indirect consequences, very closely.
In Ukraine, the euro rate began rising in July after a prolonged quiet period. Euro supply is sufficient to meet retail market demand.
Short-term (2–4 weeks): In the Ukrainian market, the euro could remain in the 51.30–51.55 UAH/EUR range.
Medium-term (2–4 months): If the euro continues to strengthen globally, the rate in Ukraine will reach 51.50–52.25 UAH/EUR.
Long-term (6+ months): By year-end, the euro rate could range between 52.60 and 53.60 UAH/EUR. The main factors driving the rate are Fed decisions on benchmark rates, ECB rate decisions, EU inflation levels, and the situation in the Middle East.
August could bring fast-moving exchange rate surprises. The escalation of the US-Iran conflict and wild oil price swings heighten volatility risk. At such times, a currency strategy must be extremely cautious, yet decision-making flexibility remains vital for capturing yield and preserving capital.
Global conflicts are a reason to trust only the strongest currencies. Expected shifts relate to a potential resolution of the US-Iran conflict, which will influence the future trajectory of the EUR/USD pair.
A stable Fed rate provides no boost to the dollar. The EUR/USD pair is heavily influenced by geopolitics, but rate hike forecasts also matter. Investors need to monitor US economic news to timely pivot their currency savings strategy.
Safe investments above all. A small portion of a portfolio can be allocated toward generating fast profits from speculative trading, but the bulk of funds should be placed into low-risk capital preservation—namely physical currency purchases.
Liquidity in the crosshairs of currency strategy. A lack of stability and predictability elevates the role of liquid currencies, keeping the dollar and euro central to portfolios. Both medium- and long-term investor plans should be built around investments in these currencies.
A sharp shift by global investors toward the euro is a signal to concentrate funds in the dollar. The US economy is currently expanding actively and the US currency remains the most liquid asset, so investors should keep approximately 50–60% of their currency portfolio in USD.
Exiting part of currency holdings should only follow thorough rate movement analysis. The rise of the euro to 51.27 UAH/EUR offers fresh opportunities to partially sell off euro assets acquired early in the year when the rate was at 49.51 UAH/EUR. However, it is not time to dump euros entirely, as rates could rise further over the course of 2026.
A balanced currency portfolio shouldn’t consist solely of dollars. If diversification is part of your personal financial plan, adding 10% in Swiss francs to baseline currencies makes sense. Purchasing British pounds can also be considered.
National currency for routine expenses, dollars for long-term investments. The devaluation trend for the national currency persists despite multi-billion dollar NBU interventions to maintain exchange rate stability. US dollar savings remain a reliable guarantee against capital erosion.
What matters on the news front: Investors should analyze everything linked to oil quotes, Middle East developments, and new US-Iran agreements. It is also important to track labor market data and US inflation figures, which will ultimately form the foundation for upcoming Fed Committee decisions on rate changes. A Fed statement signaling a rate hike will be the cue to adjust currency strategies. The next Fed Committee meeting in mid-September will reveal the future path of the EUR/USD pair. In Ukraine, the key drivers affecting the FX market will be international reserve levels, tranche disbursements of loans and financial aid from partners, data on export volumes and port infrastructure, the energy situation, and frontline conditions.
This material was prepared by analysts at the international multi-service FinTech platform KYT Group and reflects their expert, analytical professional judgment. The information presented in this review is purely informational and must not be construed as actionable advice.
The company and its analysts make no assurances and accept no liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional guarantees of completeness, timeliness obligations, updates, or supplements.
Users of this material must independently evaluate risks and make informed decisions based on their own assessment and analysis of the situation using various available sources they consider sufficiently qualified. Before making any investment decisions, consulting an independent financial advisor is recommended.
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According to Interfax-Ukraine, the National Bank of Ukraine has completed a significant portion of its negotiations and discussions with the International Monetary Fund (IMF) and will soon adopt and announce a new, substantial package of foreign exchange liberalization measures. As NBU Governor Andriy Pyshnyy stated during a press briefing on Thursday, the upcoming liberalization measures will apply to both individuals and businesses.
“We have completed a significant portion of the negotiations and discussions with our colleagues at the International Monetary Fund. Accordingly, a significant package of foreign exchange liberalization measures will be announced, affecting individuals, including businesses. The National Bank has always prioritized the interests of Ukrainian businesses regarding foreign exchange liberalization,” the regulator’s head noted.
Pyshnyy emphasized that stimulatory foreign exchange liberalization has remained one of the National Bank’s key priorities since 2023. According to him, the regulator supports measures that have a positive effect and stimulate the country’s economic recovery and development.
As previously reported, in the materials for the first review of the Extended Fund Facility (EFF) program, published on its website, the IMF notes that currency liberalization should depend on the fulfillment of key preconditions—including deeper foreign exchange markets, well-anchored inflation expectations, and sustained financial stability—while ensuring that these are balanced with economic needs.
The National Bank of Ukraine (NBU) reduced its interventions in the interbank market last week by $59.9 million, or 5.6%, to $1.0145 billion, according to statistics on the regulator’s website.
According to the National Bank’s data, during the first four days of last week, the average daily net deficit in currency purchases and sales by legal entities decreased to $140.9 million from $168.5 million during the same period a week earlier, totaling $563.7 million.
In the retail foreign exchange market, the average daily net deficit decreased: from Monday through Thursday, it stood at $9.2 million, compared to $11.6 million the week before last, and non-cash currency sales exceeded purchases on all those days.
The official hryvnia-to-dollar exchange rate, which started last week at 44.6676 UAH/$1, weakened to 44.8110 UAH/$1 by the end of the week.
The same trend was observed in the cash market, where the hryvnia-to-dollar exchange rate weakened by 12 kopecks over the past week: the buying rate fell to 44.51 UAH/$1, and the selling rate to nearly 44.90 UAH/$1.
Issue No. 1 – July 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
In the first half of July, devaluation trends were almost imperceptible, although demand for foreign currency remained high. However, the official exchange rate stands at 44.75 UAH per dollar, down from 44.79 UAH per dollar at the beginning of the month. That said, during the first two weeks of July, the exchange rate tended to fluctuate toward depreciation.
Last month, the foreign exchange market saw a significant increase in demand, but the NBU has been managing the situation and continues to do so by conducting regular currency interventions. The cost of preventing a noticeable devaluation was over $5.78 billion, sold by the National Bank through interventions between June 1 and July 3.
General expectations for the second half of July: the agricultural sector will begin exporting more actively, and pressure on the hryvnia will gradually ease thanks to foreign exchange proceeds from agricultural exporters. At the same time, the NBU will continue to be the main seller and is likely to maintain the psychological threshold of 45 UAH/USD by supplying currency from its international reserves. However, a seasonal decline in demand for foreign currency, combined with increased supply from agricultural exports, should support the hryvnia in July.
Global Context
In July, markets are awaiting the U.S. Federal Reserve’s decision on the benchmark interest rate, with the Fed Committee meeting scheduled for the end of the month. It will be interesting to see how forecasts and trends have changed. Until recently, traders expected the rate to be cut in 2026. However, the war in Iran and accelerating inflation in the U.S. have altered the outlook. Currently, the likelihood that the Federal Reserve will raise rates at its July meeting is increasing.
Meanwhile, the CME’s FedWatch tool puts the probability of the central bank raising interest rates by 25 basis points at 46.5%. On the Kalshi prediction market platform, the probability stands at 36%. Forecasts of a rate hike began to dominate the investment community after U.S. President Donald Trump announced the resumption of the U.S. blockade of Iranian ports near the Strait of Hormuz and the imposition of a 20% tariff on all cargo passing through the strait.
Another significant factor influencing the Fed’s potential decision to raise rates is the inflation situation.
However, the outlook for prices in the U.S. is quite optimistic: according to the U.S. Bureau of Labor Statistics, consumer prices fell in June amid lower energy and gasoline prices, marking a reversal of the sharp rise seen in April–May due to the conflict with Iran. In June, the Consumer Price Index rose by 3.5% compared to June 2025, which is lower than in May (4.2%). This could serve as the basis for the Fed’s decision to keep rates unchanged for now and postpone consideration of this issue until September.
Earlier, Federal Reserve Chair Christopher Waller had already signaled a possible rate change, recently stating that the Fed had waited too long to raise rates amid rising inflation. However, he added that the Fed should not overreact or raise rates too quickly.
In mid-July, the dollar remains stable after a fairly prolonged decline, with the EUR/USD pair trading at 1.1417, whereas July began at 1.1406 USD/EUR. Meanwhile, the U.S. Dollar Index, which measures the currency’s value against a basket of six major currencies, remained unchanged at 100.9 on July 15.
In Europe, however, they did not hesitate: the ECB raised its key deposit rate by 25 basis points in June due to a sharp rise in energy prices. Consequently, the strategy changed: while the ECB had cut interest rates four times in the first half of 2025 (from 3% at the start of the year to 2% by mid-June), it reversed course in June, raising the rate to 2.25%. There are several reasons for this, including the acceleration of inflation in the eurozone to 3.2% in May of this year. In addition, the sharp rise in energy prices resulting from military actions between the U.S. and Iran is once again raising concerns about oil supplies, as well as about a possible further spike in inflation in the EU.
The Domestic Ukrainian Context
In the first half of July, demand for foreign currency declined slightly compared to June. This is also evident from the results of the NBU’s foreign exchange interventions. While the NBU sold $1.14 billion on the market in the last week of June, it sold $0.871 billion in the first week of July. Pressure on the hryvnia eased in July, partly due to inflows from agricultural exports. Consequently, the pace of devaluation slowed significantly during the first half of July. While the month began with an official exchange rate of 44.79 UAH per dollar, by mid-month the rate had reached 44.75 UAH/dollar. The hryvnia’s stability is supported by the U.S. dollar’s decline against the euro, but there are also factors that may soon work against it, notably the resumption of rising oil prices amid the conflict between the U.S. and Iran.
On a positive note, international reserves increased in June: as of July 1, according to preliminary data, they stood at $51.27 billion.
The NBU reported that reserves increased by 12.1% in June thanks to foreign exchange inflows from international partners, which exceeded the National Bank’s net foreign exchange sales and the country’s foreign currency debt payments. In total, $11.3 billion was deposited into the government’s foreign currency accounts at the National Bank last month, while $269.7 million was paid for servicing and repaying the government’s foreign-currency debt. According to the NBU’s balance sheet data, the bank sold $5.147 billion on the foreign exchange market in June.
Loans and aid to Ukraine from its partners continue to flow in. At the end of June, the special fund of the state budget received an additional 3.9 billion euros from the European Union, which is to be used to strengthen the capabilities of the defense-industrial complex and ensure urgent deliveries for the front lines. Prior to this, in June, Ukraine also received 3.2 billion euros in budget support under this program, bringing the total amount of funds under this instrument to 7 billion euros last month. In July, IMF Executive Directors are expected to consider the first review of the Extended Fund Facility (EFF) program for Ukraine and the disbursement of a second tranche of approximately $690 million. Earlier, Ukrainian Finance Minister Serhiy Marchenko reported that the IMF Executive Board meeting is scheduled for July 20, and Ukraine has already submitted all necessary documents to the Fund.
Certain unexpected developments in Ukraine are linked to a rather rapid change in the government, as it was only on July 12 that President Volodymyr Zelenskyy announced the need to reshuffle the Cabinet of Ministers and reported the resignation of Prime Minister Yulia Svyrydenko. Svyrydenko’s government had been in office for nearly a year. Serhiy Koretskyi became Ukraine’s new prime minister. His nomination was approved by the Verkhovna Rada on July 16.
U.S. Dollar Exchange Rate: Trends and Analysis
The slow devaluation trend continued in July, which, as before, is in line with the flexible exchange rate strategy implemented by the National Bank of Ukraine (NBU). During the first half of July, the hryvnia lost almost no value, as the month began with an official exchange rate of 44.79 UAH per dollar, and by mid-July, the rate had reached 44.75 UAH/USD. On the interbank market on July 15, trading took place at a rate of 44.72–44.76 UAH/USD. Despite a noticeable increase in activity among agricultural exporters bringing in foreign currency proceeds, the National Bank of Ukraine remains the primary seller of currency on the interbank market.
In the cash market in mid-July, the buying rate was 44.35–44.60 UAH/USD, and the selling rate was 44.95–45.20 UAH/USD. Spreads remained unchanged in July, ranging from 0.40 to 0.65 UAH/USD.
Key influencing factors:
• Weakening demand for the dollar on the interbank foreign exchange market in the first half of June and slight downward fluctuations. The hryvnia is supported by NBU interventions, reduced demand, and the entry of agricultural exporters into the market.
• Cash market—fluctuations are very slow. In the cash market, the hryvnia has even strengthened compared to the last days of June, moving from a selling rate of 45.05–45.30 UAH/USD to a range of 44.80–44.90 UAH/USD.
• International factors: Tensions in the Middle East continue to escalate, and U.S. President Donald Trump has even threatened to strike Iran’s bridges and power plants if the country does not return to negotiations.
• Market expectations: In mid-July, the international market is focused on the next Federal Reserve Committee meeting, scheduled for late July, although expectations vary. It is possible that the Fed will maintain its current strategy of keeping rates unchanged, but there is also a chance of a key rate hike. In Ukraine, the main focus is on the situation at the front, as well as the unexpected change in government.
Forecast
• Short term (1–2 weeks): The base range is 44.70–45.00 UAH/USD; the exchange rate will move in different directions depending on demand and the inflow of new supply from exporters.
• Medium term (2–3 months): 44.90–45.30 UAH/$. A decline in the dollar’s value on the international market due to risks associated with changes in the Fed’s benchmark rate, as well as against the backdrop of uncertainty in the Middle East, will contribute to some stabilization of the hryvnia exchange rate this summer.
• Long term (6+ months): In the baseline scenario, the depreciation trend remains the dominant factor, and the exchange rate could reach 46.50 UAH/USD by the end of the year. Exchange rate fluctuations will be directly influenced by inflows into international reserves, the level of demand from importers, international oil prices, and the National Bank’s clear strategy for supporting the foreign exchange market through interventions.
Euro Exchange Rate: Trends and Analysis
In the first half of July, the euro exchange rate on the domestic market rose slightly in line with the euro’s appreciation against the U.S. dollar on the international market. While July began with an official exchange rate of 51.03 UAH per euro, as of July 16, the rate stood at 51.06 UAH/euro.
A similar trend in the euro exchange rate was observed in Ukraine’s cash market in July. The buying rate in mid-July ranged between 50.5 and 51 UAH per euro, while the selling rate ranged between 51.35 and 51.7 UAH per euro. The spreads between the buying and selling rates for the euro widened in June–July, reaching approximately 0.65–1 UAH, whereas at the end of June they were in the range of 0.55–0.85 UAH per euro.
Key influencing factors:
• On the international market, the euro continued to strengthen in July, driven largely by the ECB’s rate hikes. The euro strengthened as a result of the ECB’s monetary policy and growing geopolitical uncertainty regarding the ceasefire between the U.S. and Iran.
• The ECB is raising interest rates: as global oil prices continue to rise, inflationary pressure on ECB policymakers is increasing, reinforcing expectations of another rate hike in September of this year.
• There is no shortage of euros; demand is very moderate. In the cash market, euro sales outpace purchases, and the euro exchange rate at currency exchange offices and banks has remained virtually unchanged during the first two weeks of July.
Forecast:
• Short term (2–4 weeks): On the Ukrainian market, the euro may remain within the range of 51.20–51.65 UAH/€.
• Medium term (2–4 months): If the euro continues to strengthen on the international market, it may fluctuate in Ukraine within the range of 51.80–52.40 UAH/€.
• Long term (6+ months): By the end of the year, the euro exchange rate may range between 52.80 and 53.80 UAH/€. Key influencing factors include the ECB’s decision on rate hikes, the Federal Reserve’s decision on changes to the benchmark rate, inflation rates in the U.S. and the EU, the situation in the Middle East, and negotiations between the U.S. and Iran.
Recommendations for Businesses and Investors
Monetary policy drives exchange rate trajectories. The central banks of the U.S. and the EU are planning to raise interest rates. This will affect the dollar’s position in the global market, but at the same time signal to investors to invest in safe-haven currencies.
Escalation in the Middle East is affecting exchange rates. There is no lasting peace between the U.S. and Iran, and the latest rounds of attacks are impacting the dollar’s position in the global market. The euro is regaining ground.
A cool head and reliable tools are the path to stable returns. In a situation of heightened uncertainty and high risks, it makes sense to focus on reliable and liquid currency assets, giving preference to the dollar and the euro.
The focus is on safe investments. Stability and predictability aren’t just about 2026. For investors, this means a cautious strategy that prioritizes capital preservation above all else.
Liquidity is a key priority. It makes sense to include the world’s major currencies—the dollar and the euro—in a currency portfolio as a foundation. The optimal currency allocation this summer is either a 60%–40% split with a higher share of the dollar, or a “50%–30%–20%” split, where the dollar accounts for the largest share, followed by 30% in the euro, and 20% in the Swiss franc or British pound sterling.
There’s no need to rush when diversifying your portfolio. The world is currently dominated by abrupt and reckless geopolitics, so an investor’s goal should be to make cautious and reliable investments in dollars and euros. However, you can always set aside a small portion of your savings to invest in other currencies or in three-month foreign-currency government bonds.
Oil prices are rising again, which does not help the dollar. In mid-July, Brent crude oil futures rose by $1.43 (or 1.7%) to $84.73 per barrel, while West Texas Intermediate (WTI) crude rose by $1.2 (or 1.5%) to $79.34 per barrel. Against the backdrop of escalating tensions in the Middle East, oil prices may continue to rise, signaling to investors the need to reallocate up to 30% of their portfolios into the euro.
The NBU’s policy rate remains at 15% for now. In June 2026, inflation in Ukraine slowed to 7.2%. This implies a possible reduction in bank deposit rates, which will increase the role of foreign currency savings as a tool for protecting funds against inflation.
Buying euros when the exchange rate is stable is the right decision. Amid the absence of sharp fluctuations, it is important to invest in the euro in a timely manner, but without sacrificing the main portion of your portfolio, which is denominated in U.S. dollars.
Pay close attention to decisions by the U.S. and EU central banks, as well as to inflation data from the U.S. and the eurozone. Regular analysis of the economic situation in the eurozone and the U.S. will help you make timely adjustments to your short-term strategy and successfully exit certain currency assets to enter other currency investments without incurring losses.
What’s important in the news. The most significant events that will have a major impact on currencies will take place not only in the boardrooms of the EU and U.S. central banks but also in the geopolitical arena. Investors should closely monitor news regarding changes to key interest rates in the U.S. and the EU, as these changes will provide support for either the dollar or the euro. However, news from the U.S. regarding further actions in Iran and the possible continuation of peace talks between these countries should not be overlooked. In Ukraine, the situation on the currency market will be influenced by news about new inflows from partners, the state of international reserves, the results of massive enemy attacks and possible damage to infrastructure, as well as data on crop yields and the level of agricultural exports.
This material was prepared by analysts at KYT Group, an international multi-service product-based FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed 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 additional guarantees of completeness, obligations regarding timeliness, or updates or additions.
Users of this material should independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently reliable. We recommend consulting with an independent financial advisor before making any investment decisions.
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Issue No. 2 – June 2026
Analysis of the Current Situation on Ukraine’s Foreign Exchange Market
In June, the hryvnia continued to trend toward devaluation, but by the end of the month, the official exchange rate had not exceeded 45 UAH per dollar, remaining at 44.85 UAH/USD. However, on the cash foreign exchange market, banks and currency exchange offices have been setting selling rates significantly higher than the official rate—45.05–45.30 UAH/USD—for over two weeks now.
On Ukraine’s interbank foreign exchange market, the National Bank of Ukraine (NBU) remains the primary seller, covering importers’ requests primarily thanks to international aid tranches. The National Bank expects that the upcoming receipt of international aid under the Ukraine Support Loan program and progress in negotiations with the IMF regarding the EFF program will significantly strengthen its ability to maintain the stability of the foreign exchange market. In fact, market expectations currently suggest that a managed devaluation of the hryvnia will take place over the next three months, though the pace will not be rapid. Meanwhile, one of the factors supporting the hryvnia is the situation on the international market, particularly the drop in oil prices on the global market. This should stabilize oil traders’ pricing policies and somewhat weaken demand for foreign currency.
Global Context
In June, international markets were awaiting the Federal Reserve Committee’s decision on the key interest rate. Forecasts indicated that the rate would remain unchanged. Following the Federal Reserve Committee’s meeting, this is exactly what happened—the Committee decided to maintain the target range for the federal funds rate at 3.5% to 3.75%. The Fed’s statement noted that economic activity is expanding at a steady pace, despite heightened uncertainty, which is partly driven by the conflict in the Middle East. “Growth in labor productivity and capital investment remains strong. Job growth is keeping pace with labor force growth, and the unemployment rate has remained virtually unchanged. Inflation remains elevated relative to the Committee’s 2% target, partly reflecting supply shocks that have led to price increases in certain sectors, particularly in energy,” the Fed explained in justifying its decision to keep rates unchanged.
The situation in the Middle East is having a significant impact on the markets, as uncertainty regarding the future course of the conflict between the U.S. and Iran is leading to increased volatility in both the oil and capital markets. In June, markets were buoyed by hopes for a swift end to the war and the reopening of the Strait of Hormuz. On June 17, the U.S. and Iran signed a 14-point Memorandum of Understanding (MoU) that included “an immediate and definitive cessation of military operations on all fronts.” In effect, Iran agreed to make “every effort to ensure the safe passage of commercial vessels free of charge for 60 days.” However, by the end of June, attacks resumed from both Iran and the U.S. First, an Iranian missile struck a cargo ship in the Strait of Hormuz, after which the U.S. launched a series of strikes against Iran, hitting several targets—a move the U.S. Central Command described as a direct response to “ongoing aggression” against commercial shipping. Iran later retaliated with strikes on U.S. bases in Kuwait and Bahrain. It is currently unclear whether the ceasefire allegedly agreed upon by the U.S. and Iran will actually hold. Meanwhile, the Strait of Hormuz is a key waterway for oil and gas shipments, and therefore the ability to transport oil through it affects oil prices.
Global oil prices are constantly influenced by the situation in the Middle East. In early June, the price of Brent crude reached $97 per barrel, but it then declined daily throughout the rest of the month. However, after attacks resumed in late June, prices began to rise again (reaching $74 per barrel on June 29), as traders assessed the fragile ceasefire in the Persian Gulf.
The U.S. dollar exchange rate also reacts sharply to international news and global uncertainty. However, there is noticeable optimism here—over the month, the DXY index showed a 2.23% appreciation of the dollar. While the EUR/USD exchange rate stood at around 1.1611 dollars per euro in mid-June, by the end of June it had fallen to 1.1407 dollars per euro. This trend can be explained by the increasing likelihood of a Fed rate hike in 2026, as well as optimism regarding the U.S. economic outlook.
Domestic Ukrainian Context
Demand for foreign currency remained consistently high in June, and to prevent the hryvnia from further devaluation, the National Bank had to increase its foreign currency sales, meaning that interventions rose. Over the 26 days of June, the NBU sold more than $4.63 billion on the market; by comparison, in May, the amount of foreign currency sold by the NBU on the interbank market was $3.03 billion. Consequently, pressure on the hryvnia is intensifying due to both large volumes of various imports (including fuel and electrical equipment) and the strengthening of the dollar on the international market.
As of June 30, the official exchange rate stood at 44.85 UAH/USD, having strengthened compared to June 11, when it reached 44.97 UAH/USD, but having weakened compared to early June, when it was 44.27 UAH/USD.
Inflows of international aid are expected to replenish international reserves, thereby allowing the NBU to maintain its flexible exchange rate policy by increasing currency sales on the interbank market while preventing the hryvnia from depreciating rapidly. At the end of June, European Commission President Ursula von der Leyen announced the allocation of the first tranche of macroeconomic assistance to Ukraine—3.2 billion euros from a 90-billion-euro loan. This 3.2 billion euros is the first of three tranches of macro-financial assistance planned for 2026. In total, Ukraine is set to receive 8.35 billion euros under this loan this year; the second tranche, amounting to approximately 3.7 billion, is expected in the fall, and the third tranche, totaling about 1.45 billion euros, is scheduled to be disbursed at the end of the year.
There is already positive news regarding the tranches under Ukraine’s loan program with the IMF. Prime Minister Yulia Svyrydenko met in June with IMF First Deputy Managing Director Dan Katz, where the parties discussed the results of the first review of the Extended Fund Facility (EFF) program and agreed on the next steps in their cooperation. According to her, the IMF Executive Board plans to approve the next tranche for Ukraine, amounting to $690 million, by mid-July.
U.S. Dollar Exchange Rate: Trends and Analysis
In June, the hryvnia managed to stabilize and avoid crossing the psychological threshold of 45 UAH per dollar; however, as previously mentioned, this is primarily due to increased interventions by the National Bank, which exceeded $4.63 billion over the four weeks of June.
As of the end of June, the official exchange rate stood at 44.85 UAH/USD, whereas at the beginning of the month it was 44.27 UAH/USD. On the interbank foreign exchange market on June 29, trading took place at a rate of 44.84–44.88 UAH/USD.
In the cash market, the dollar is already trading above the 45 UAH per dollar mark, and the exchange rate in the retail market differs quite significantly from the official rate. While at the beginning of June the buying rate was within the range of 43.85–44.05 UAH/USD and the selling rate was 44.4–44.6 UAH/USD, on the last day of June the buying rate was 44.5–44.8 UAH/USD and the selling rate was 45.05–45.30 UAH/USD. The spreads between the buying and selling rates on the cash market widened to 0.5–0.75 UAH/USD in June.
Key influencing factors:
· Demand for foreign currency on the interbank market continues to grow, and the hryvnia is depreciating. The NBU is covering importers’ requests through currency interventions, the volume of which increased significantly in June—to over 4.63 billion USD
· There are no significant fluctuations in the cash market, but the market has crossed a psychological threshold. Expectations of further devaluation persist, and banks and currency exchange offices are selling the dollar at a rate of 45.05–45.30 UAH/USD.
· International factors: The U.S. and Iran signed a memorandum, but the parties to the conflict subsequently resumed military operations. This is putting pressure on oil prices, which are rising. Meanwhile, the dollar is being supported by expectations that the Fed will raise rates after all.
· Market sentiment: On the international market, all attention is currently focused on U.S. labor market statistics and inflation data, which could form the basis for the Fed’s July rate review. In Ukraine, amid trade imbalances and a lack of sufficient foreign currency supplies from exporters to meet market demand, the NBU remains the main market maker; demand for foreign currency is rising, and expectations of devaluation are intensifying.
Forecast
· Short term (1–2 weeks): base range of 44.80–45.25 UAH/USD, with likely short-term fluctuations toward a stronger hryvnia.
· Medium term (2–3 months): 45.10–45.60 UAH/USD. The dollar’s strengthening on the global market increases the likelihood of a rapid appreciation of the U.S. currency in the Ukrainian market as well. The future trajectory of the euro/dollar pair depends on the Fed’s decisions regarding changes to the key interest rate and the situation in the Middle East.
· Long term (6+ months): In the baseline scenario, no changes are expected—the hryvnia will depreciate, however, the extent of the devaluation depends on a number of factors, including dollar exchange rate fluctuations on the international market, the government budget deficit, the NBU’s monetary policy, the level of international aid, the volume of international reserves, and the country’s need for new multibillion-volume energy imports. By the end of 2026, the exchange rate could reach 46.50 UAH/$.
Euro Exchange Rate: Trends and Analysis
In June, the euro fell against the hryvnia on the domestic market amid fluctuations in the international currency market, where the dollar regained ground. Thus, while the month began with an official exchange rate of 51.55 UAH/EUR, as of June 30, the official euro exchange rate stood at 51.16 UAH/EUR.
The cash market followed the trends in the global market, resulting in a noticeable strengthening of the hryvnia against the euro in the domestic retail segment. While in early June the buying rate ranged from 50.85 to 51.3 UAH/EUR and the selling rate from 51.75 to 51.90 UAH/EUR, as of June 30, the buying rate for the euro was already 50.50–50.90 UAH/EUR, and the selling rate was 51.40–51.60 UAH/EUR. The spreads between the buying and selling rates for the euro remained virtually unchanged in June, ranging from 0.55 to 0.85 UAH/EUR.
Key influencing factors:
· The euro has weakened noticeably on the international market, driven by the strengthening of the dollar amid expectations of a possible Fed rate hike. In June, the euro lost ground against the backdrop of expectations that the Fed would raise rates, which is forecast to occur in late July.
· Investors are opting for the dollar as they anticipate a Fed rate hike. Interest in the euro is waning, as forecasts suggest that higher rates will boost the value of U.S. bonds, making dollar-denominated Treasury securities a more attractive investment vehicle.
· Moderate demand for the euro is evident in Ukraine’s cash market. Banks and currency exchange offices are not experiencing a shortage of euro cash.
Forecast:
· Short term (2–4 weeks): On the Ukrainian market, the euro may remain within the range of 51.20–51.50 UAH/€.
· Medium term (2–4 months): if the dollar continues to strengthen on the international market and the euro depreciates against the dollar, the euro may fluctuate in Ukraine within the range of 51.15–51.65 UAH/€.
· Long term (6+ months): The euro exchange rate may remain within the range of 51.80–53.50 UAH/€. The key influencing factors remain the situation in the Middle East, the Fed’s upcoming decisions on key interest rate changes, inflation rates in the U.S. and the EU, and whether the ECB will decide to make another rate change in 2026.
Recommendations for Businesses and Investors
July will not bring stability—exchange rate fluctuations in the euro/dollar pair are likely to intensify. This will require flexibility in investment plans, but also close attention to international news and factors affecting the exchange rates of major currencies.
The dollar is regaining ground, while the euro is losing it. The dollar is currently being supported by high inflation linked to the energy shock, as well as the agreement between the U.S. and Iran and optimism that the parties to the conflict will adhere to its terms. For investors, this means confidently investing in the dollar.
The Fed may adjust interest rates in 2026. Rising inflation in the U.S. has deprived the Fed of the opportunity to cut rates, and markets are now fully pricing in a possible rate hike by October. This will continue to support the U.S. dollar and put pressure on the euro. For investors, this means a willingness to focus on the dollar, but at the same time a need to diversify assets by allocating a portion of investments to the euro.
The conflict between the U.S. and Iran remains unresolved. Since the matter is not yet settled and operations in the Middle East continue, the dollar remains under pressure from the global situation. For investors, this means the need to consider several scenarios and have flexible options for exiting certain assets in order to reallocate funds to others.
Investment liquidity is at the heart of the strategy. The rather unexpected fluctuations in the euro/dollar pair—where the dollar managed to strengthen rapidly, while the euro has suffered significant losses—only underscore the need to build a portfolio that takes all factors into account, while keeping the most liquid currencies—the dollar and the euro—at the core of the strategy, although it makes sense to reduce the euro’s share in the portfolio to 15–20%.
Investment security is a key factor when choosing a strategy. Against the backdrop of the hryvnia’s prolonged depreciation trend, it is advisable to use the hryvnia for specific transactions and day-to-day expenses, but to avoid establishing long-term investment plans in the national currency.
Investors’ sharp shift toward the dollar in the global market leaves no doubt: investing in the dollar is an extremely reliable source of profit. Currently, all data point to robust growth in the U.S. economy, so the U.S. dollar remains the most liquid currency, and investors should maintain at least 60% of their currency portfolio in dollars.
Diversifying your currency portfolio—through liquid currencies.
The euro’s pullback to 51.16 UAH/USD presents new opportunities to add the euro to your portfolio in line with your chosen individual strategy. However, this is also an opportunity to acquire some other liquid currencies, particularly British pounds and Swiss francs.
Keep an eye on decisions by the U.S. and EU central banks, as well as on inflation and labor market data in the U.S. and the European Union. Over the coming month, this information will be of paramount importance to investors, as it will directly influence potential interest rate changes by central banks.
A strong or weak dollar—that’s the key question for the next six months. The dollar’s exchange rate will be most influenced by the implementation of the agreement between the U.S. and Iran, inflation trends in the U.S., and changes to the Fed’s benchmark rate. A rate cut could provide support for the euro.
Key news to watch. It is essential to monitor developments related to oil prices, the U.S.-Iran agreement and its practical implementation, as well as U.S. labor market and inflation data. The most important signal for adjusting strategy will be the Fed’s announcement regarding a change in the benchmark interest rate. The upcoming Federal Open Market Committee (FOMC) meeting in late July will indicate the potential future trajectory of the euro/dollar pair. In Ukraine, the main factors influencing the foreign exchange market will be the state of international reserves, the receipt of loan tranches and aid from partners, the situation in the energy sector, and possible developments on the front lines.
This material was prepared by analysts at KYT Group, an international multi-service FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed 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 additional guarantees of completeness, obligations regarding timeliness, or updates or additions.
Users of this material should independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they personally deem sufficiently reliable. We recommend consulting with an independent financial advisor before making any investment decisions.
REFERENCE
KYT Group is an international, multi-service, marketplace-style FinTech platform that provides financial companies with access to services for promoting their offerings, as well as advertising and consulting services.
Issue No. 1 – June 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
In the first half of June, the hryvnia continues to depreciate, while demand for foreign currency is rising. The official dollar exchange rate has come very close to the psychological threshold of 45 UAH, and on the over-the-counter foreign exchange market in mid-June, the selling rate had already reached 45.0–45.30 UAH/USD in some cases.
There is no foreign currency shortage, as the National Bank continues to act as the main seller, fulfilling importers’ requests. However, the devaluation fluctuations are fundamentally driven by the trade deficit, as imports significantly outstrip exports; consequently, importers almost always obtain foreign currency exclusively from the NBU. Energy equipment, fuel, and military exports are the main import categories that constantly require significant amounts of foreign currency. Since the beginning of 2026, the NBU has not purchased a single dollar on the interbank market, while the volume of selling interventions has exceeded $18.26 billion. Pressure on the hryvnia is mounting, and the main source of its weakening could be proceeds from the sale of the new grain harvest, followed by the transfer of foreign currency proceeds to importers’ accounts in Ukraine. However, there is still no certainty that the upcoming harvest will bring significant foreign currency inflows to the interbank market or that, as early as this summer, agricultural producers will help the foreign exchange market and bring stability to the national currency.
Global Context
In June, markets are awaiting the U.S. Federal Reserve’s decision on the key interest rate. Previously, investors expected the rate to be cut twice this year, but given the acceleration of inflation in the U.S. due to the war in Iran, these forecasts have already been revised. The Federal Reserve Committee meeting will take place on June 16–17, and the Fed is currently expected to keep rates at their current level: between 3.5% and 3.75%. Interestingly, some analysts are predicting that the next rate cut will not occur until at least 2027. For example, Goldman Sachs believes that the Fed will lower the federal funds rate in June and December of next year to a range of 3–3.25%.
As for the factors that may guide the Federal Open Market Committee when making rate decisions, the key ones are traditionally the state of the labor market and price trends. The latest U.S. labor market data show that in May, the country’s economy added 172,000 jobs, significantly exceeding market expectations. The unemployment rate remained stable at approximately 4.3%, while average hourly earnings rose by 0.3% compared to the previous month and by 3.4% year-over-year. Thus, the stable labor market provides a basis for keeping rates at their current level. As for inflation, new U.S. CPI data for May showed a 0.5% increase compared to April, while annual inflation accelerated to 4.2%. The rise in prices is attributed to energy shocks caused by tensions in the Middle East, rising oil prices, and high transportation risks.
The situation in the Middle East has long driven both investor sentiment and exchange rate fluctuations in the currency markets, but now news has finally emerged of an agreement between the U.S. and Iran that is expected to end the blockade of Iranian ports, reopen the Strait of Hormuz, and facilitate safe shipping in the region. The final signing of the agreement is expected as early as this week in Geneva.
Meanwhile, the European Central Bank raised interest rates last week in an effort to curb price increases caused by the war between the U.S., Israel, and Iran. Consequently, the key interest rate rose from 2% to 2.25%. This is the ECB’s first rate hike since September 2023. ECB President Christine Lagarde noted that the war in the Middle East is creating inflationary pressure, and the decision to raise rates is consistent with a range of scenarios reflecting the possible evolution of this shock and its impact on the eurozone’s medium-term outlook.
As for the U.S. dollar, the DXY index showed a monthly appreciation of nearly 0.6%. But the euro is still coming out on top in June: against the backdrop of news about the agreement between the U.S. and Iran and the ECB’s recent decision to raise rates, the EUR/USD exchange rate reached 1.1611 per euro on June 15, whereas on June 8, the rate stood at 1.1502 per euro. Investors are now focused on the Federal Reserve Committee meeting, the outcome of which will be crucial for the future exchange rate dynamics of the EUR/USD pair.
The Domestic Ukrainian Context
In June, demand for foreign currency from importers increased, while currency sellers—exporting companies—decided to hold onto their proceeds amid the dollar’s appreciation. As a result, the National Bank sold $766.4 million during the first week of June and $1.15 billion during the second week of the month. Pressure on the hryvnia was also intensified by the situation on the international market and expectations of an agreement between Iran and the U.S. As of June 16, the official exchange rate stood at 44.81 UAH/USD, which is lower than the rate on June 11, when it reached 44.97 UAH/USD. This indicates a slight strengthening of the hryvnia. On the cash market, the exchange rate began to fluctuate rapidly, but there is no panic. By increasing its interventions, the NBU signaled its unwillingness to accept a new exchange rate level—above 45 UAH/USD—but further exchange rate fluctuations beyond this psychological threshold are quite likely as early as June.
Importantly, as of early June, Ukraine’s international reserves, according to preliminary data, stood at $45.72 billion, which is 5.2% less than at the beginning of May. The NBU explained that this trend is due to the National Bank’s foreign exchange interventions and the country’s debt payments in foreign currency. These transactions exceeded the proceeds from the placement of foreign-currency government bonds and from international partners.
In June, Ukraine began receiving fairly large amounts of financial support. First, this includes the seventh tranche of funding from the European Union under the Ukraine Facility program, amounting to 2.8 billion euros. As Prime Minister Yulia Svyrydenko explained, the funds will be used to finance priority expenditures in the state budget, particularly social and humanitarian needs. Second, Ukraine is expected to receive the first tranche of 5.9 billion euros from the EU this month as part of a 90-billion-euro loan program. According to EU High Representative for Foreign Affairs and Security Policy Kaja Kallas, the first funds under the program will be used to purchase unmanned aerial systems, that is, for defense needs.
The news of the successful continuation of Ukraine’s cooperation with the IMF also adds to the optimism. It was recently announced that Ukraine and the International Monetary Fund have agreed at the expert level to revise the Extended Fund Facility (EFF) program, and the agreement is expected to be approved in the coming weeks. According to Yulia Svyrydenko, this paves the way for Ukraine to receive the next tranche under the program, amounting to $690 million.
U.S. Dollar Exchange Rate: Trends and Analysis
The gradual devaluation of the hryvnia is in line with the principles of an exchange rate flexibility strategy. Thus, while the official exchange rate stood at 44.27 UAH/USD in early June, it reached 44.81 UAH/USD on June 16. On the interbank market on June 15, trading took place at a rate of 44.8–44.83 UAH/USD. As before, the National Bank remains the main seller of foreign currency.
As expected, the cash market is moving forward, pushing the hryvnia beyond the psychological threshold of 45 UAH/USD. In early June, the buying rate ranged from 43.85 to 44.05 UAH/USD, while the selling rate was 44.4–44.6 UAH/USD. By mid-month, the buying rate had risen to 44.5–44.7 UAH/USD, and the selling rate to 45.0–45.3 UAH/USD. Spreads narrowed slightly to 0.45–0.6 UAH/USD.
Key influencing factors:
· Rising demand for the dollar on the interbank foreign exchange market in June and active fluctuations toward devaluation. The hryvnia continues on a depreciation trajectory; the NBU is selling currency to importers, while exporters are holding onto their proceeds.
· Cash market: the 45 UAH/USD threshold has been crossed. There is no panic on the cash market, but the public expects further depreciation, and demand for dollars is growing;
· International factors: U.S. President Donald Trump announced the conclusion of an agreement with Iran, which, as expected, bolstered the euro, as investors’ confidence in the euro and the EU economy—which relies on imported energy—increased;
· Market sentiment: In mid-June, attention in international markets is focused on the Federal Reserve’s policy meeting, although forecasts indicate that there will be no change in interest rates. In Ukraine, despite positive news regarding the arrival of billions in financial aid, the hryvnia will remain under pressure from high demand, and this trend will continue in the coming weeks.
Forecast
· Short term (1–2 weeks): base range of 44.95–45.35 UAH/USD; the hryvnia will attempt from time to time to return to a level around 44.85 UAH/USD, but the overall trend is toward depreciation.
· Medium term (2–3 months): 45.15–45.70 UAH/USD. If the euro continues to strengthen amid a rebound in investor confidence following the resolution of the conflict in the Middle East, fluctuations against the dollar may be more subdued. However, the Fed’s future policy and decisions regarding changes to the key interest rate will be significant.
· Long term (6+ months): In the baseline scenario, the depreciation trend remains the main one, and the exchange rate may cross the 46.50 UAH/USD threshold toward the end of the year. The most important factors influencing exchange rate fluctuations are the National Bank’s strategy of supporting the foreign exchange market through interventions, further liberalization of the foreign exchange market, grain exports, as well as the volume and regularity of international aid inflows.
Euro Exchange Rate: Trends and Analysis
The euro resumed its appreciation on the domestic foreign exchange market after a temporary decline in May. While the official exchange rate stood at 51.55 UAH/EUR at the beginning of June, it reached 52.04 UAH/EUR by mid-month. The main driver of these exchange rate changes was the trend toward a strengthening euro on the international market.
The cash market reacted logically to the euro’s strengthening. Thus, while the buying rate ranged from 50.85 to 51.3 UAH/euro in early June,
and the selling rate was 51.75–51.90 UAH/EUR, by mid-June the buying rate for the euro had already reached 51.25–51.70 UAH/EUR, and the selling rate was 52.25–52.55 UAH/EUR. Spreads remained virtually unchanged at 0.6–0.9 UAH/EUR.
Key influencing factors:
· The euro has strengthened significantly on the international market, driven by geopolitical events and changes in ECB interest rates. In June, the euro strengthened thanks to investor optimism following the announcement of an agreement between the U.S. and Iran.
· The ECB raised interest rates in response to rising inflation caused by the war in Iran. Specifically, it raised its main deposit rate from 2% to 2.25%. Inflation in the Eurozone rose to 3.2% in May 2026 from 3% in April. The ECB’s inflation target is 2%.
· Demand for the euro in Ukraine remains low. There is no shortage of euros in the cash market, and sales of the euro by the public outweigh purchases.
Forecast
· Short term (2–4 weeks): On the Ukrainian market, the euro may remain within the range of 52.10–52.45 UAH/euro.
· Medium term (2–4 months): if the euro continues to strengthen on the international market, the euro may fluctuate within the range of 52.20–52.60 UAH/euro in Ukraine.
· Long term (6+ months): the euro exchange rate may remain within the range of 52.50–54.50 UAH/euro. Key influencing factors include the Fed’s interest rate decisions, inflation rates in the U.S. and the EU, and geopolitical issues—specifically, the implementation of the peace agreement between the U.S. and Iran.
Recommendations for Businesses and Investors
June saw an acceleration in exchange rate fluctuations. The main trend toward hryvnia depreciation has already been established, which means investors should stick to their currency strategies by investing in liquid foreign currency assets.
The Fed is assessing the stable U.S. labor market, which may prompt the regulator to keep interest rates unchanged at least until mid-fall. For investors, this means continued volatility in the euro/dollar pair, with alternating movements toward strengthening of either the euro or the dollar. A sound strategy at this time involves investing in both major currencies.
The situation in the Middle East will continue to influence exchange rates even after the signing of an agreement between the U.S. and Iran. Global risks will determine the level of confidence in the major currencies, but for now, the euro has a better chance of strengthening its position.
Safe investments are the foundation of every currency portfolio. Now is not the time to bet on the hryvnia; the national currency can be used temporarily for certain speculative transactions, but foreign currency cash should be the focus of safe investments this summer.
The key is liquidity. The world’s major currencies—the dollar and the euro—should account for the largest share of a currency portfolio. The currency allocation depends on the investor’s individual strategy and specific priorities, but the optimal distribution is to hold 60% of assets in dollars and 40% in other liquid currencies.
Other European currencies should serve as a safety net, not as the main component of your investments. To diversify your currency portfolio, you can hold about 15% in British pounds and 10% in Swiss francs.
Short-term hryvnia investments in government bonds or deposits are possible, but only for terms of up to 3 months. A small portion of funds—up to 10% of total assets—can be held for income from hryvnia-denominated securities or deposits; however, you shouldn’t count on high returns: the NBU’s strategy does not anticipate an increase in the value of money.
The focus is on decisions by the U.S. and EU central banks and on updated inflation data. A thorough analysis of the economic situation in the Eurozone and the U.S. will allow you to adjust and successfully update your long-term foreign currency savings strategy in a timely manner.
The geopolitical situation is a significant factor influencing strategy. The successful signing of an agreement between the U.S. and Iran sets the stage for further strengthening of the euro, since the EU is particularly dependent on imported energy resources; thus, the opening of the Strait of Hormuz will primarily affect the price of oil and fuel on the European market, and the euro will strengthen its position.
What’s important in the news. It is necessary to monitor everything related to the Federal Reserve Committee’s decisions, as well as announcements from the ECB and information on inflation and labor markets in the U.S. and the Eurozone. It is also important to analyze the signing of the agreement between the U.S. and Iran and changes in the price trajectory on the oil market. In Ukraine, the main factors influencing the situation on the foreign exchange market will be massive enemy attacks, potential damage to infrastructure, the state of the energy sector, news from partners, and the state of international reserves.
This material was prepared by analysts at KYT Group, an international multi-service FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed 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 additional guarantees of completeness, or any obligations regarding timeliness, updates, or additions.
Users of this material should independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently reliable. We recommend consulting with an independent financial advisor before making any investment decisions.
REFERENCE
KYT Group is an international, multi-service, marketplace-style FinTech platform that provides financial companies with access to services for promoting their offerings, as well as advertising and consulting services.
