Currency Rate Outlook in Ukraine: June 4–10 Predictions
Financial analyst Oleksiy Kozarev has released his weekly forecast for Ukraine's foreign exchange market from June 4 to June 10. Several key drivers are currently shaping the currency landscape:
- Geopolitical tensions in the Middle East;
- Fluctuations in oil prices;
- Monetary policy decisions by the U.S. Federal Reserve and the European Central Bank (ECB);
- Interventions conducted by the National Bank of Ukraine (NBU).
According to Kozarev, inflation in the European Union currently sits at 2.3%, slightly above the ECB's official target of 2%. The ECB is scheduled to meet on June 11, where a 0.25% rate hike is considered possible. Meanwhile, U.S. inflation stands at 3.8%, and Kevin Warsh, the new chair of the Federal Reserve, took over from Jerome Powell in May.
Currency Pair Forecasts
For the euro-dollar pair, the forecast indicates a trading range between $1.152 and $1.174 per euro. Brent crude oil, at the time of the forecast, is priced around $98 per barrel, with an expected weekly range of $89 to $108 per barrel. Gold prices are projected to fluctuate between $4,370 and $4,590 per troy ounce.
On the domestic front, the NBU is conducting almost daily interventions by selling foreign currency on the interbank market. The central bank's weekly spending to support the hryvnia is forecasted at $720 million to $890 million. The average annual dollar exchange rate embedded in the state budget is 45.7 hryvnias per dollar. Kozarev notes:
'The 45.7 hryvnias per dollar set as the average rate in this year's budget is the maximum benchmark the market can currently expect.'
For cash dollars, banks are expected to offer rates between 43.80 and 44.80 hryvnias, while exchange offices of financial companies will likely quote 43.90 to 44.75 hryvnias. For the euro, the cash rate forecast in banks ranges from 51.10 to 52.50 hryvnias, and in exchange offices, from 51.40 to 52.00 hryvnias. On the interbank market, the dollar is projected at 44.10 to 44.70 hryvnias, and the euro at 51.10 to 51.90 hryvnias.
Kozarev describes the current market conditions as "relatively calm, but I would call it the calm before the storm." He identifies the Middle East situation—particularly developments in the Strait of Hormuz—as the primary factor influencing the euro-dollar pair. The euro remains a key instrument for speculation due to wide quote spreads, which could ripple into Ukraine's currency market.
Given the volatile geopolitical environment, Ukraine must closely monitor shifts in external markets, as these can significantly impact the hryvnia's value. The NBU's interventions and responses to policy moves by major central banks will continue to be critical in determining the stability of the foreign exchange market in the near term.