Issue No. 2 – September 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
In the second half of September, the hryvnia was under constant downward pressure, but the NBU’s participation in trading kept the national currency from falling further. As a result, as of September 29, the official exchange rate stood at 44.81 UAH per dollar, whereas at the beginning of the month it was at 44.52 UAH per dollar.
Several key factors are currently influencing exchange rate fluctuations. The first is the security situation, which deteriorated significantly in September due to intensified Russian shelling of large enterprises, gas stations, warehouses, and civilian infrastructure. Because of this new large-scale destruction, the need to import goods and equipment into the country is growing, putting pressure on the exchange rate. The second is the international situation, which consists of two key factors: the war in Iran and high oil prices, as well as fluctuations in the euro/dollar exchange rate. Meanwhile, the volume of the NBU’s interventions in the foreign exchange market remains quite significant: according to published data, the National Bank sold more than $4.92 billion on the market over the 25 days of September.
Global Context
The global market saw the most significant event of recent months in September: on September 16, the Federal Reserve Committee decided to raise interest rates. Consequently, the benchmark interest rate was increased by 0.25 percentage points—to a range of 3.75–4%. The Committee explained its decision as an effort to bring inflation back to the 2% target more quickly. Fed Chair Kevin Worsh noted that inflation is “too high and has been so for too long.” According to him, the Committee needed to ensure that core inflation was moving toward the target “clearly and at a sufficient pace.” Among the main risks contributing to heightened uncertainty in the U.S., leading economic experts typically cite geopolitics, particularly the war in Iran and the associated volatility in energy prices. The Fed is expected to raise the benchmark rate once more by the end of 2026.
As tensions in the Middle East show no signs of abating, the oil market is under immense pressure from the so-called “Strait of Hormuz factor.” Yesterday, September 28, oil prices rose again. This time, the reason was a delay in ceasefire negotiations between the U.S. and Iran after U.S. President Donald Trump rejected the proposed peace agreement. As a result, oil prices rose: Brent futures climbed 1.27% to $105.64 per barrel.
There is slightly more certainty in the international foreign exchange market, where the dollar has been steadily strengthening throughout the second half of September following the Fed’s decision to raise interest rates. The EUR/USD pair has been trading at around 1.1366 USD/EUR in the final days of September.
Domestic Ukrainian Context
In September, the foreign exchange market remained under pressure from increased demand for foreign currency. The volume of interventions by the National Bank of Ukraine (NBU) remains very substantial: between August 31 and September 25, the NBU sold $4.924 billion on the market. As a reminder, in August, the volume of interventions totaled $4.82 billion. Businesses’ demand for foreign currency is rising, as intensified enemy shelling and destruction have led to a significant increase in business costs and a growing need to import equipment. In addition, the hryvnia is under pressure from fuel prices, which have risen sharply over the past month amid global trends in the oil and petroleum products markets.
Meanwhile, inflation in Ukraine continues to rise—in August 2026, consumer inflation accelerated to 8.1% year-over-year, prompting the Board of the National Bank of Ukraine to decide in September to raise the discount rate by 0.5 percentage — to 16% — in light of persistent fundamental price pressures. Regarding high prices, the NBU explained that last month’s price dynamics were driven by rising fuel costs amid the escalation of the war in the Middle East, as well as faster growth in certain administrative tariffs, which is largely a consequence of Russian attacks on critical infrastructure. The National Bank notes that raising the discount rate will help keep inflation expectations under control and return inflation to a steady downward trajectory toward the 5% target over the policy horizon.
However, the main issue is not inflation, but the state of the national budget. President Volodymyr Zelenskyy stated that the budget deficit for military needs amounts to $27 billion, and shortly after this statement, Prime Minister Serhiy Koretskyy announced a budget austerity regime. Given the significant funding shortfall, the government has deferred 39 billion hryvnias in capital expenditures, originally scheduled for September, to the end of 2026.
The Ministry of Finance expects to secure the necessary funds for the budget from the EU, G7 countries under the ERA mechanism, the IMF, the World Bank, the United Kingdom, and other partners. According to Finance Minister Serhiy Marchenko, Ukraine can avoid a budget crisis if it receives $29.5 billion in international financing by the end of 2026, as provided for under a number of support programs. However, for this to happen, the Verkhovna Rada and the government must fulfill the necessary obligations, including, in particular, signing the law on the taxation of digital platforms and adopting amendments regarding politically exposed persons.
Against the backdrop of a significant intensification of Russian shelling of civilian infrastructure and business facilities, Ukraine faces major threats of a substantial increase in government spending coupled with a simultaneous decline in tax revenues to the state budget. The economic slowdown means that international support will play an even more critical role. Meanwhile, the European Union has approved the eighth regular tranche for Ukraine under the Ukraine Facility program. As a result, the Ukrainian budget will receive nearly 3 billion euros in the near future. The funds are intended to support Ukraine’s macrofinancial stability, the country’s recovery and modernization, the functioning of public administration, and the implementation of reforms.
U.S. Dollar Exchange Rate: Trends and Analysis
Fluctuations in the dollar exchange rate in September were mixed: while the dollar weakened at the beginning of the month, it strengthened steadily in Ukraine during the second half of the month, following the trend on the international market. Consequently, from 44.52 UAH/USD at the beginning of September, the official exchange rate reached 44.81 UAH/USD as of September 29.
The cash market mirrored the interbank market’s movements, meaning the hryvnia weakened while the dollar strengthened. By the end of the month, the cash market appeared to have finally and firmly broken through the psychological barrier of 45 UAH per dollar. As of September 29, the buying rate was 44.50–44.75 UAH/USD, and the selling rate was 45.05–45.30 UAH/USD. The spreads between the buying and selling rates increased slightly to 0.6–0.8 UAH/USD.
Key influencing factors:
· High demand for foreign currency on the interbank foreign exchange market. Rising fuel prices, as well as the need to rebuild destroyed buildings, warehouses, gas stations, and other facilities, require foreign currency for import purchases, which increases demand for the dollar and the euro.
· The NBU is ready to inject foreign currency into the market to curb the hryvnia’s downward trend. Most currency sales take the form of interventions, which bring the exchange rate back below 44.90 UAH/USD. Only the regulator’s interventions determine the exchange rate range for the hryvnia.
· Demand for foreign currency in cash is growing in Ukraine. In anticipation of a difficult winter, the population is seeking to convert its savings into safe, liquid currencies to protect against inflation and devaluation.
· International factors: The war in Iran is still far from over, and the U.S. has already announced plans to intensify bombing in Iran after the midterm congressional elections in November.
· Oil prices are constantly influenced by the situation in the Middle East. Regular spikes in oil prices lead to a steady rise in the cost of petroleum products, which affects inflation rates in the U.S., the EU, and Ukraine.
· Market expectations: In the global market, expectations center on the next increase in the Fed’s benchmark interest rate. In Ukraine, the main focus is on the intensifying drone and missile attacks on major cities—particularly Dnipro, Odesa, Zaporizhzhia, and Kyiv—which are triggering new waves of migration and causing massive economic losses.
Forecast
· Short term (1–2 weeks): base range of 44.80–44.95 UAH/USD; fluctuations may be in different directions depending on the volume of the NBU’s foreign exchange interventions.
· Medium term (2–3 months): 44.95–45.40 UAH/USD. On the international market, the dollar is strengthening due to the Fed’s rate hike. In Ukraine, this factor also influences the dollar’s exchange rate movements; however, the main factor remains the volume of interventions the NBU is prepared to offer the market here and now, as well as the NBU’s plans to prevent the hryvnia from sharply depreciating.
· Long-term (6+ months): A depreciation trend will prevail, and by the end of winter—assuming the state budget deficit worsens and there are fairly prolonged delays in the receipt of new tranches of international aid—the exchange rate could reach 45.80–46.50 UAH/USD. Intensified attacks by the Russian Armed Forces on cities, infrastructure, and businesses are leading to a steady increase in pressure on the foreign exchange market. Exchange rate fluctuations will be most significantly influenced by the volume of international aid, the state of the energy sector, the scale of destruction caused by Russian attacks, and fluctuations in oil and petroleum product prices.
Euro Exchange Rate: Trends and Analysis
Throughout September, the euro exchange rate on the Ukrainian market declined. While the official rate was 51.64 UAH/EUR at the beginning of the month, it stood at 50.97 UAH/EUR as of September 29. The main reason for this trend is developments in the international market, where in the second half of September the dollar regained ground thanks to the Fed’s rate hike, while the euro, accordingly, lost ground.
In Ukraine’s cash market, the buying rate ranges from 50.40 to 51.90 UAH/euro, while the selling rate ranges from 51.35 to 51.60 UAH/euro. The spreads between the buying and selling rates began to narrow in September and reached 0.55–0.80 UAH/euro by the end of the month.
Key influencing factors:
· On the international market, the dollar is strengthening, while the euro is weakening. The Fed’s decision to raise the benchmark interest rate had the greatest impact on currency quotes. This provided significant support for the dollar.
· The ECB already implemented one rate hike in September, but another one cannot be ruled out.
Europe is experiencing a sharp rise in inflation, primarily due to rising fuel prices and uncertainty related to the conflict in the Middle East.
· In Ukraine, citizens are actively buying euros to build a financial cushion and save for travel to EU countries. For many citizens, the euro often takes priority over the dollar, as many have relatives living in the eurozone, and some view the EU as a place of refuge should the security situation deteriorate.
Forecast:
· Short term (2–4 weeks): On the Ukrainian market, the euro may trade within the range of 50.95–51.40 UAH/euro.
· Medium term (2–4 months): Depending on global events, the course of the war in Iran, and changes in energy prices, the euro may regain its lost ground; in that case, the official exchange rate in Ukraine could hover around 51.55–51.85 UAH/euro.
· Long term (6+ months): the euro exchange rate could reach 52.50–53.50 UAH/euro. The main factors influencing the euro exchange rate are inflation in the U.S. and EU countries, monetary policy decisions by the Fed and the ECB, further increases in the benchmark interest rate, the situation in the Middle East, and fluctuations in oil prices.
Recommendations for Businesses and Investors
In October, exchange rate fluctuations in the euro/dollar pair may intensify. This will require planning for potential flexibility in investment programs, as well as close attention to international news.
The dollar is regaining ground, while the euro is losing value. The dollar is currently being supported by the Fed’s benchmark rate hike, which has driven up the price of U.S. Treasury bonds. For investors, this means favorable investment opportunities in dollar-denominated assets.
The Fed may raise rates again in 2026. Although the main rate hike already took place in September, leading analysts believe the Fed may raise rates once more in December due to inflationary risks. This will provide support for the U.S. dollar.
The war in Iran is a source of global uncertainty. U.S. military operations in the Middle East continue, putting pressure on oil prices and adding uncertainty to financial markets. For investors, this means the need to always have several scenarios in mind and to plan for flexible options to exit certain assets in order to reallocate funds to others.
Investment security is the key factor when choosing a strategy. Recent exchange rate fluctuations in Ukraine’s foreign exchange market clearly indicate a depreciation trend. Therefore, it is advisable to use the hryvnia for short-term investments and current expenses, rather than for long-term investment plans.
Investment liquidity is a key focus. Due to global uncertainty and volatility in the oil market, fluctuations in the euro/dollar exchange rate do not follow predictable patterns; therefore, an investment portfolio should be structured with all factors in mind. It makes sense to keep the dollar and the euro as the main currencies in the portfolio, while the proportionate ratio of currencies depends on one’s plans and expected returns.
Investing in the dollar is a reliable source of profit. The U.S. economy continues to grow rapidly, as indicated by official statistics, and the U.S. dollar remains one of the most liquid currencies. The dollar’s share in a currency portfolio may well amount to 50–65%.
Diversify your currency portfolio with liquid currencies. The euro’s decline to 50.97 UAH/USD provides investors with opportunities to purchase the euro at a favorable rate for their portfolio in accordance with their individual strategy.
Holding different currencies in a portfolio helps safeguard investments. Investors should opt for liquid currencies whose exchange rates do not exhibit volatility. Among such currencies is the British pound sterling. The Bank of England is expected to raise interest rates twice over the next six months, as rising energy prices increase the risk of sustained inflation. This could open up new investment opportunities at more favorable rates.
Fluctuations in the dollar’s exchange rate on the international stage are always a reason for careful analysis and research into returns. The dollar exchange rate in October and November will be influenced by factors such as the course of the war in Iran, inflation trends in the U.S., the U.S. midterm congressional elections and their results, as well as signals from the Federal Reserve regarding its readiness for further tight monetary policy.
An increase in the NBU’s discount rate is not a reason to immediately switch to hryvnia deposits. Against the backdrop of rising inflation and intensifying devaluation fluctuations, hryvnia deposits should be used with great caution, and the largest share of capital should be allocated to stable foreign currency savings.
Key news to watch. It is important to monitor everything related to oil prices, potential new agreements between the U.S. and Iran, as well as U.S. labor market and inflation statistics. Pay close attention to news regarding the ECB’s plans to adjust its key interest rate. In Ukraine, the main factors influencing the foreign exchange market will be the state of international reserves, the volume of aid and loan tranches received from partners, the situation in the energy sector, and the destruction of infrastructure resulting from the aggressor’s attacks.
This material was prepared by analysts at KYT Group, an international multi-service FinTech product 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 obligations regarding timeliness, updates, or additions.
Users of this material must 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.
Issue No. 1 – September 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
The National Bank of Ukraine is firmly keeping the hryvnia exchange rate under control, strengthening its influence by increasing the volume of foreign exchange interventions. As a result, the hryvnia is strengthening despite a serious foreign exchange shortage in the market caused by a lack of funds from exporting companies. The hryvnia exchange rate set by the NBU remained virtually unchanged during the first half of September: as of September 1, it stood at 44.52 UAH/USD, and as of September 15, it was 44.62 UAH/USD. Of course, the cost of maintaining a stable hryvnia is quite high, as the volume of interventions reached $5.915 billion between August 3 and September 4. However, demand for foreign currency remains consistently high, as preparations for winter continue, and companies are therefore continuing to import energy equipment. The difficult situation with grain exports, caused by regular Russian attacks on port infrastructure and ships, is creating additional pressure on the foreign exchange market. According to the Ministry of Agrarian Policy, total exports of grains and legumes since the start of the 2026/27 marketing year amount to 4.255 million metric tons, compared to 5.162 million metric tons a year earlier. The resumption of Russian attacks on gas stations will also mean a need for additional equipment and fuel purchases, which must also be paid for in foreign currency—with the NBU remaining the primary seller on the interbank foreign exchange market.
Global Context
The global market is experiencing its final days of complete uncertainty, as the Federal Reserve (Fed) is set to announce its interest rate decision on September 16. Currently, the Fed is expected to raise rates by 25 basis points. A new report on U.S. inflation showed that prices rose more than expected in August. According to data from the Bureau of Labor Statistics, the Consumer Price Index rose 3.4% year-over-year and 0.4% month-over-month in August, which was fully in line with the consensus forecast. Core inflation slowed to 2.4% year-over-year (the lowest level since 2021), but its monthly increase of 0.3% was higher than the 0.2% forecast by economists. According to CME FedWatch, markets are pricing in a 90% probability of a rate hike at the Fed’s September 16 meeting.
Meanwhile, gold is rebounding strongly. U.S. gold futures rose 0.1% to $4,409.30 per troy ounce, driven by the Consumer Price Index data and, consequently, expectations of a Fed rate hike in September.
The EUR/USD pair is trading around 1.1530 USD/EUR in mid-September, although the dollar periodically dipped to 1.1630–1.1648 USD/EUR during the first two weeks of the month. However, compared to August, when the exchange rate peaked at 1.1709 USD/EUR, the dollar has been steadily strengthening in September. This is happening precisely as the Fed’s policy meeting—the “H-hour”—approaches.
Domestic Ukrainian Context
In the first half of September, the foreign exchange market was under pressure from high demand for foreign currency. The volume of NBU interventions is increasing: while the NBU sold $1.018 billion on the interbank market during the first week of August, it sold $1.329 billion during the week of August 31 through September 4. In total, from the beginning of August through September 4, according to data published by the National Bank, the regulator’s currency sales amounted to $5.915 billion, while its currency purchases totaled only $0.45 million.
The increase in the volume of interventions is leading to a rapid decline in international reserves. According to the NBU, Ukraine’s international reserves as of early September, based on preliminary data, stood at $48.66 billion. They had decreased by 5% in August. The National Bank explained that this trend was driven by a reduction in international financial aid, while the volume of foreign exchange interventions remained at a level close to that of July.
Demand for foreign currency among the public is growing because, against the backdrop of stable exchange rates, citizens are choosing to convert their savings from hryvnia to dollars and euros for a sense of security amid high uncertainty and the prolonged continuation of military operations. In August, net foreign currency purchases by households increased by 26% to $0.562 billion, while in July the balance between purchases and sales stood at $0.5 billion.
Foreign currency is becoming not only a way for households to avoid losses in the event of a hryvnia devaluation, but also an opportunity to preserve their funds amid rising inflation. And inflation in Ukraine is rising. According to the NBU, it accelerated to 8.1% year-over-year in August. Among the main reasons are rising fuel prices, as well as higher administrative inflation amid increases in water supply and wastewater disposal rates. NBU experts note that price pressures remain elevated due to the consequences of Russian military aggression and the war in the Middle East, while the intensification of Russian attacks on logistics, manufacturing, and energy infrastructure facilities is increasing business costs and limiting the domestic supply of goods and services.
Significant challenges are emerging regarding the fulfillment of the state budget revenue plan. As Finance Minister Serhiy Marchenko recently stated, the government has established a procedure for financing expenditures under conditions of limited liquidity: upon receipt of funds, the security and defense sectors will be financed first, with the remaining expenditures covered only if additional resources become available.
Ukraine has already received the main international aid packages planned for 2026. However, there is news of a new multi-billion package that has already been approved by the European Commission. This amounts to 6.1 billion euros for the purchase of drones and missiles for the Patriot air defense system. As for support for social needs through new tranches from the EU, there is currently no clear information on how much additional funding Europe will allocate to Ukraine by the end of 2026. However, European Commission spokesperson Balázs Újvári recently stated that the European Commission continues to assess the situation with Ukraine’s public finances to determine the country’s priority needs for additional funding this year. Therefore, the EU will discuss potential sources of additional funding in detail and subsequently announce the amounts of additional tranches to support Ukraine’s state budget.
U.S. Dollar Exchange Rate: Trends and Analysis
In the first half of September, the hryvnia initially managed to strengthen to 44.46 UAH per dollar, but then the National Bank of Ukraine (NBU) gradually brought the exchange rate back to its late-August level through interventions; as of September 15, the exchange rate stood at 44.62 UAH/USD. The hryvnia’s future trajectory depends entirely on the volume of interventions the National Bank is prepared to carry out.
In the cash market in mid-September, the buying rate was 44.20–44.50 UAH/USD, and the selling rate was 44.80–45.00 UAH/USD. Spreads have remained virtually unchanged, ranging between 0.50–0.60 UAH/USD.
Key influencing factors:
· Rising demand for foreign currency in the interbank foreign exchange market. Businesses and infrastructure damaged by shelling require restoration, and equipment is being purchased abroad, which is driving additional demand for foreign currency.
· The NBU controls the exchange rate and keeps the hryvnia within strict limits. The NBU remains the primary seller of foreign currency, and its participation in trading determines the exchange rate.
· The public seeks to safeguard its savings, and consequently, demand for foreign currency in cash is rising. Anticipating blackouts, a harsh winter, new logistical challenges, and possibly commodity shortages, citizens are accelerating the transfer of their savings into major currencies—the dollar and the euro.
· International factors: The conflict between the U.S. and Iran continues, significantly destabilizing international security and oil prices. Meanwhile, U.S. President Donald Trump has stated that the war in the Middle East will end after the midterm congressional elections, which will take place in November.
· Market expectations: In the global market, expectations are centered on the Federal Reserve’s September meeting, and traders are forecasting a 25-basis-point increase in the Fed’s benchmark interest rate. In Ukraine, attention is focused on the new strategy of drone and missile attacks on rear cities, which is causing economic losses and heightening public fears about getting through the winter.
Forecast
· Short term (1–2 weeks): base range of 44.65–44.95 UAH/USD; fluctuations may move in different directions depending on the volume of NBU interventions.
· Medium term (2–3 months): 44.90–45.60 UAH/USD. On the international market, the dollar may strengthen in response to the Fed’s rate hike, as the value of Treasury securities—which will attract investors—will automatically rise. No sharp fluctuations are expected in Ukraine, and if the National Bank adopts a devaluation policy, it will occur very gradually with short-term pullbacks.
· Long term (6+ months): In the baseline scenario, the trend toward devaluation remains, as before, and by the end of winter—assuming the situation regarding the state budget deficit worsens and there are fairly prolonged delays in the receipt of new tranches of international aid—the exchange rate could reach 45.80–46.50 UAH/USD. As previously forecast, Russia’s massive attacks on cities, infrastructure, and businesses are leading to increased pressure on the foreign exchange market, as import needs automatically rise. Exchange rate fluctuations will be most influenced by new inflows of international aid, the extent of damage caused by the attacks, and fluctuations in international oil prices.
Euro Exchange Rate: Trends and Analysis
During the first half of September, the euro initially strengthened on the Ukrainian market but then retreated. While the official exchange rate was 51.64 UAH/euro at the beginning of the month, it stood at 51.52 UAH/euro as of September 15. As before, the euro’s exchange rate dynamics in Ukraine are influenced by a single factor: the euro’s position on the international market.
On Ukraine’s cash market, the buying rate ranges from 51.05 to 51.40 UAH/euro, while the selling rate ranges from 51.80 to 52.00 UAH/euro. There is a very noticeable trend toward wide spreads: in the first half of September, the spreads between the euro’s buying and selling rates widened to 0.80–1.0 UAH/EUR.
Key influencing factors:
· On the international market, the euro still outperforms the dollar.
Currency quotes are most influenced by the ECB’s recent decision to raise the key deposit rate by 0.25 percentage points to 2.5%.
· Risks to EU economies are mounting, calling into question the euro’s further strengthening in the global market. Europe’s economic outlook is considered extremely uncertain, and the risk of accelerating inflation remains high.
· Demand for the euro remains high in the cash market. Citizens are purchasing euros—both in cash and non-cash forms—to build savings, pay for their children’s education, prepare for potential migration, and for other purposes. Although the dollar dominates sales in the cash market, the euro’s share is growing steadily in 2026.
Forecast:
· Short term (2–4 weeks): On the Ukrainian market, the euro may trade within the range of 51.60–51.80 UAH/euro.
· Medium term (2–4 months): If the euro changes direction on the international market as a result of the Fed’s September decision to raise interest rates, the official exchange rate in Ukraine may range between 51.70 and 51.95 UAH/euro.
· Long term (6+ months): Next year, the official euro exchange rate could reach a range of 52.80–53.50 UAH/EUR. The main factors influencing the euro exchange rate are inflation in the U.S. and EU countries, the monetary policies of the Fed and the ECB (i.e., planned changes to the benchmark interest rate), escalation or, conversely, a lull in the Middle East, and energy price trends.
Recommendations for Businesses and Investors
By the end of September, fluctuations in the euro/dollar exchange rate may stabilize. These fluctuations will be primarily driven by the monetary policy of the U.S. Federal Reserve.
The dollar may soon regain ground, while the euro will lose value. The dollar will be supported by the U.S. Federal Reserve’s decision to raise the benchmark interest rate by 25 basis points. This will affect the price of U.S. Treasury bonds and signal to investors to invest in the dollar.
The Fed is preparing to adjust interest rates. Rising inflation in the U.S. has deprived the Fed of the opportunity to lower rates, and markets are now pricing in a rate hike at the Fed’s next meeting. This will provide support for the U.S. dollar while simultaneously putting downward pressure on the euro.
Politics also plays a role in the EUR/USD currency pair. The U.S. is actively preparing for the midterm congressional elections in November, which means that intense political battles in the U.S. will periodically push the dollar to peak levels.
The U.S.-Iran conflict—the timeline for a resolution remains unknown. In the Middle East, the war in Iran is creating new risks for the currency market, as the situation is negatively impacting the oil market. During this period, investors would be wise to consider several scenarios and multiple currencies when building their currency reserves.
The key is investment security. Although the hryvnia is holding steady at up to 45 UAH/USD, the national currency is best suited for urgent and one-off decisions, while a long-term plan should include liquid currencies—the dollar and the euro.
Investment liquidity—after a detailed analysis of the situation. The high volatility of the euro/dollar pair signals the need to develop a currency plan that takes key influencing factors into account, and at the core of the strategy, it makes sense to plan investments in the most liquid currencies—the dollar and the euro. The optimal ratio this fall could be 50/50 or 65/35 (with a larger share of the dollar).
Diversify your currency portfolio using liquid currencies. If an investor’s plan includes not two but four currencies, it is worth considering the British pound and the Swiss franc. The share of savings in these two European currencies can reach 20%.
The investor’s goal is to make cautious and reliable investments. This means that the majority of savings should be held in liquid currencies, with a smaller portion (up to 15%) allocated to other instruments—among which purchasing three-month government bonds denominated in foreign currency appears to be the optimal choice.
Central banks will indicate where exchange rates are headed on the global market. Paying attention to the monetary policies of the EU and the U.S. will help you rebalance your currency portfolio in a timely manner as part of a medium-term investment strategy.
It’s important not to panic. Markets are often influenced by unpredictable events, but an investor’s strategy is their personal financial plan; therefore, a cool-headed assessment—not emotions—will help avoid risks.
What’s important in the news. First and foremost, news from the U.S. regarding the Federal Reserve Committee’s decision on changing the benchmark interest rate. We are also analyzing statements from U.S. President Donald Trump regarding the war in Iran. We are monitoring oil and gold prices. The most important signal for adjusting our strategy will be a strengthening of the dollar to 1.1350–1.1400 USD/EUR. In Ukraine, the main factors influencing the situation on the foreign exchange market will be the NBU’s strategy for intervening in the interbank market, the state of international reserves, news regarding the receipt of multi-billion-dollar loan tranches and aid from partners (particularly in terms of budgetary support), the situation in the energy sector, and any potential news from the front lines.
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 supplements.
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. Before making any investment decisions, we recommend consulting with an independent financial advisor.
REFERENCE
KYT Group is an international, multi-service, marketplace-style FinTech product platform that provides financial companies with access to services for promoting their offerings, as well as advertising and consulting services.
Issue No. 1 – August 2026
Analysis of the Current Situation in Ukraine’s Foreign Exchange Market
In the first half of August, the dollar exchange rate in Ukraine was influenced by the National Bank of Ukraine’s flexible exchange rate strategy, which involves participating in trading on the interbank foreign exchange market through foreign currency interventions. As a result, the exchange rate—which had been attempting to break through the 44.83 UAH/USD mark—returned to the level seen at the beginning of the month—44.70 UAH/USD—by the end of the second week of August. The cost of this exchange rate stability was $2.11 billion, which the NBU sold to importers through foreign exchange interventions in the first half of August. This is nearly equivalent to the amount of foreign currency sold by the NBU during the last two weeks of July ($2.15 billion). Demand for foreign currency in August remains high, and the NBU is the market’s primary market maker. There is absolute stability in this regard. Thanks to the National Bank’s active participation in trading, the exchange rate remains virtually unchanged.
One of the main problems affecting the country’s economy and foreign exchange earnings is the difficult situation regarding the transport of Ukrainian goods by sea. In July and early August, Russia carried out more than 70 attacks on Ukraine’s port infrastructure and 62 strikes on ships. This effectively halted agricultural exports, which fell by 75% year-over-year in the first two weeks of August. In the long term, the halt in agricultural exports threatens to lead to a buildup of grain in warehouses, as well as multimillion losses for agricultural companies. However, this is unlikely to affect exchange rate fluctuations, as the National Bank continues to keep the situation fully under control.
Global Context
Global capital markets are awaiting the September meeting of the Federal Reserve Committee, where a decision to change the benchmark interest rate could be made on September 16. However, there is currently no certainty regarding this. Analysts even predict that the Fed may leave rates unchanged in September, as recently published data showed a decline in U.S. inflation for the second consecutive month. The U.S. Consumer Price Index rose 3.4% year-over-year in July, compared to 3.5% in June. This was reported by the Bureau of Labor Statistics. However, there remains some chance of a rate hike—some financial experts have already expressed the view that the central bank should raise rates by the end of 2026 to bring inflation, which exceeds the 2% target, under control.
Meanwhile, tensions are rising in the Middle East, and oil prices are highly volatile: on August 17, Brent crude reached $88.44 per barrel. As before, oil prices are being influenced by the situation in the Strait of Hormuz. Last week, Iran stated that it had no intention of lifting its blockade of the strait following remarks by U.S. President Donald Trump regarding the possibility of establishing control over this strategic waterway.
The EUR/USD pair has been trending toward a weaker dollar in August—as of August 17, the exchange rate stands at $1.1594 per euro, whereas the month began at $1.1485 per euro.
Domestic Ukrainian Context
The domestic foreign exchange market has seen high demand for foreign currency in August. While the NBU sold $4.1 billion through interventions over the four weeks of July, the volume of currency sold exceeded $2.11 billion in the first two weeks of August.
International reserves are currently at a high level, which is important for macrofinancial stability and, of course, for the NBU’s ability to meet demand for foreign currency. According to the regulator, international reserves stood at $51.2 billion at the beginning of August; in July, they decreased by 0.1%. 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 slightly exceeded inflows from international partners, the issuance of foreign currency bonds, and the conversion into hryvnia of funds received under the Ukraine Support Loan program. According to the NBU’s balance sheet data, in July the bank sold $4.76 billion on the foreign exchange market and purchased $1.8 million.
In August, the NBU announced a major package of easing measures for foreign exchange restrictions on individuals, which took effect on August 11. Among the key changes is an increase in the limit on non-cash foreign currency purchases by individuals from 50,000 UAH to 200,000 UAH per month. The daily limit on cash withdrawals by individuals from foreign currency accounts in Ukraine and abroad is also being raised from 100,000 UAH to 200,000 UAH. In addition, the NBU has expanded Ukrainians’ ability to pay for goods, work, and services abroad using hryvnia accounts. The National Bank expects that the new package of foreign exchange liberalizations will generate only moderate additional demand for foreign currency, which will be insignificant relative to the size of the foreign exchange market.
Meanwhile, Ukraine continues to receive international financial support, and at the end of July, it was announced that the EU would provide a tranche of 3.47 billion euros as part of the Ukraine Support Loan. These funds are intended to finance Ukraine’s defense needs, specifically for missiles, air defense systems, fighter jets, and drones. As for the IMF loan, the volume of disbursements and the frequency of tranches depend on compliance with the conditions of the EFF program. Two more reviews of the program’s implementation with the IMF are scheduled for 2026—in September and December. If all conditions are met on time, Ukraine will be able to secure over $2.4 billion from the Fund.
Among the pressing economic challenges facing the country as it confronts Russian aggression is exports. As a result of Russian strikes on port infrastructure, maritime shipments have nearly ground to a halt, and the Ministry of Agriculture reports that losses in the agricultural sector could reach $3 billion this year. Meanwhile, the government has already lowered the minimum export prices for certain types of agricultural products to prevent a halt in exports of grains and oilseeds. However, negative trends are not limited to the agricultural sector, as the enemy is targeting major logistics hubs, which is disrupting food supplies to supermarket chains; moreover, rerouting logistics routes could lead to increased costs for producers and retailers. All of this points to a possible rapid rise in food prices, particularly for dairy products, vegetables, and fruits. As a reminder, in July 2026, inflation accelerated to 7.7% year-over-year, while prices in Ukraine rose by 0.3% month-over-month.
U.S. Dollar Exchange Rate: Trends and Analysis
Devaluation expectations have not disappeared, but in August the exchange rate remains under the full control of the NBU; consequently, temporary stability is ensured by the regulator fulfilling importers’ orders on the interbank foreign exchange market. In early August, the official exchange rate stood at 44.64 UAH per dollar, and on August 17, the NBU’s exchange rate reached 44.70 UAH per dollar. On the interbank market in mid-August, trading took place at a rate of 44.70–44.78 UAH/USD. In the cash market, the exchange rate changed only slightly: in mid-August, at banks and currency exchange offices, the buying rate ranged from 44.30 to 44.55 UAH/USD, and the selling rate ranged from 44.90 to 45.10 UAH/USD. Spreads narrowed in August to 0.4–0.6 UAH/USD.
Key influencing factors:
• Rising demand for foreign currency is offset by an increase in the volume of foreign exchange interventions by the NBU. The National Bank acts as the main seller of foreign currency and, through its supply of foreign currency, prevents the hryvnia from further devaluation.
• International factors: The protracted conflict in the Middle East is leading to erratic fluctuations in the oil market and rising prices for petroleum products. U.S. President Donald Trump stated that he intends to declare the Strait of Hormuz U.S. territory.
Tehran has emphasized that the strait will be closed or opened solely at Iran’s discretion.
• The hryvnia has strengthened on Ukraine’s cash foreign exchange market. In mid-July, the selling rate for the dollar at bank teller windows and currency exchange offices remains within the range of 44.90–45.10 UAH/USD.
• Market expectations: The main focus is on the Federal Reserve’s September meeting, when a decision to raise the benchmark interest rate is possible. However, recent inflation reports indicate a slowdown in the pace of price growth, which could well influence the Committee’s decision to leave the rate unchanged. In Ukraine, the authorities are focused on ensuring the country’s defense and thoroughly preparing for winter. The government’s main priority is protecting critical infrastructure and building up reserve stocks of fuel and equipment needed for the rapid restoration of damaged facilities.
Forecast
• Short term (1–2 weeks): base range of 44.80–45.10 UAH/USD; the NBU will attempt to keep the exchange rate within the range of 44.70–44.85 UAH/USD through interventions.
• Medium term (2–3 months): 44.95–45.30 UAH/$. The Federal Reserve’s September decision on the federal funds rate and clear signals of an impending peace in the Middle East may, in the long run, contribute to the strengthening of the dollar on the international stage. In Ukraine, the dollar will also strengthen.
• Long term (6+ months): In the baseline scenario, the depreciation trend remains the main factor, and the exchange rate could range between 45.40–46.20 UAH/USD by the end of the year. Key factors influencing the exchange rate will continue to include the volume of international reserves, new multimillion-dollar inflows of financial aid from partners, and the fulfillment of the state budget revenue plan; the situation in the energy sector and the level of protection of critical infrastructure facilities against destruction resulting from massive attacks by the Russian Armed Forces will also play a role.
Euro Exchange Rate: Trends and Analysis
Throughout July, the euro strengthened on the domestic market against the backdrop of the international market, where the dollar was weakening while the euro was gaining ground. The official euro exchange rate in Ukraine stood at 51.27 UAH/euro in early August and reached 51.71 UAH/euro by August 17. On Ukraine’s cash market, the euro has been strengthening throughout August. On August 17, the buying rate ranged from 51.05 to 51.65 UAH/euro, while the selling rate ranged from 51.85 to 52.15 UAH/euro. The spreads between the buying and selling rates for the euro widened in August and ranged from 0.45 UAH/euro to 1 UAH/euro.
Key influencing factors:
• On the international market, the euro is strengthening against the backdrop of a weaker dollar. Currency quotes are influenced by factors such as expectations of a Fed rate hike in September and rising tensions in the Middle East.
• The ECB may raise rates in September. The basis for such a decision will be rising prices in the EU: inflation in the eurozone rose to 2.9% in July.
• After a prolonged period of stability, the euro exchange rate in Ukraine began to rise sharply in August. There is no frenzied demand for the euro, and banks and currency exchange offices have sufficient cash reserves to meet demand.
Forecast:
• Short term (2–4 weeks): On the Ukrainian market, the euro may remain within the range of 51.80–52.45 UAH/€.
• Medium term (2–4 months): if the euro continues to strengthen on the international market, the exchange rate in Ukraine will reach the range of 52.20–52.90 UAH/€.
• Long term (6+ months): By the end of the year, the euro exchange rate may be within the range of 52.50–53.60 UAH/€. The main factors influencing the euro exchange rate remain unchanged: the U.S. Federal Reserve’s decision on the benchmark interest rate, the ECB’s decision on interest rate changes, the inflation rate in the EU, oil prices, and developments in the conflict in the Middle East.
Recommendations for Businesses and Investors
The dollar is losing ground against the euro on the international market. The downward trend in the U.S. currency is driven by investors’ expectations of a benchmark rate hike in September, as well as the escalation of the conflict between the U.S. and Iran. A further decline in the dollar’s exchange rate could help slow the hryvnia’s depreciation.
The Fed may adjust key interest rates. A rate hike as early as September could support the dollar in the global market, as the value of Treasury bonds will rise, which is likely to increase demand for U.S. securities, boosting the dollar.
Focus on liquid currencies. Global geopolitics is causing currency rates to fluctuate, but the dollar and the euro remain the base currencies for investors when formulating an effective currency strategy.
A war in Iran can no longer shake the dollar’s position. The acute phase of the conflict in the Middle East is not a reason to abandon investments in dollars.
Buying dollars is a timely and profitable strategy. While the domestic market is experiencing temporary, fragile stability, it makes sense to invest in the U.S. currency as part of both medium- and long-term currency strategies.
Currency savings aren’t limited to cash.
The National Bank of Ukraine’s (NBU) increase, effective August 11, of the permitted limit for purchasing non-cash foreign currency to 200,000 UAH allows investors to increase their holdings in foreign currency accounts at banks. However, cash savings will remain the key component.
Investments in precious metals and stocks are possible, but they will not be the main focus of a foreign exchange strategy. As of August 11, the NBU has allowed the unimpeded transfer of 200,000 UAH from a bank account to non-cash bank metals and securities issued by foreign entities. However, such investments should constitute only a small portion of savings—within 15%—while the dollar and the euro should remain the core components of a foreign exchange strategy.
Safe investments—a guarantee of capital preservation. In various financial scenarios, it is important to identify stable sources of income and ensure the reliability of your asset allocations.
The euro is an important part of an investment portfolio. The euro’s appreciation to 51.70 UAH/EUR opens up new opportunities for investors: either to make a quick profit by selling a portion of their euro-denominated savings, or to purchase additional euros to expand their portfolio in this currency.
Keep an eye on decisions by the U.S. and EU central banks, as well as on inflation and labor market statistics in the U.S. and EU. Since both the Fed and the ECB are preparing to consider rate hikes in September, key statistical data on inflation and employment levels in August will serve as the basis for regulators when making major decisions.
Diversification is the key to investment security. Investors should build currency portfolios across various currencies, and while the liquid U.S. dollar and euro remain the core holdings, it is advisable to periodically allocate a portion of funds to other reliable European currencies, including the British pound and the Swiss franc. It is also advisable to monitor Poland’s economic forecasts to consider potentially converting 5% of your savings into Polish zlotys.
Deposits in hryvnia—only for savings intended for purchasing foreign currency. It is advisable to choose hryvnia deposits with a term of 3–6 months and a mandatory rollover option. The interest rate on the deposit is not critical in this case, since the savings will eventually be converted into foreign currency.
What’s important in the news. Investors should monitor news from the White House regarding the prospects for the U.S.-Iran conflict. Information on U.S. Treasury bond yields will also be important. Major currency news will emerge in September—following the meetings of the Federal Reserve and ECB committees, it will become clear whether key interest rates are rising in Europe and the U.S. In Ukraine, the main indicators of the situation on the foreign exchange market will be the receipt of financial aid from partners, the level of international reserves, the situation with grain exports, developments on the front lines, information on the state of the energy sector and preparations for winter, as well as the volume of natural gas injected by Naftogaz into underground gas storage facilities.
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 warranties 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.
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. 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.
INFO
KYT Group is an international multi-service product FinTech platform operating as a marketplace, providing financial companies with access to promotion services for their offerings, alongside advertising and advisory services.
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.
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. 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.
