Significant dynamics in the cash dollar exchange rate are expected in Ukrainian banks during the current working week, which ends on June 20. According to forecasts, the rate will range from 41.05 to 41.9 hryvnias per dollar. As of the evening of June 16, banks were buying dollars at 41.2 UAH and selling at 41.7 UAH, indicating a probable decrease in the buying rate with a possible increase in the selling rate.
This is reported by Finway
Dynamics in the Cash Market and Expert Predictions
In the cash market, financial expert Oleksiy Kozyrev predicts an increase in the rate for both buying and selling. It is expected that exchange offices will set the rate within 41.1–41.8 UAH per dollar. In the evening of June 16, the average rates were 40.98 UAH (buying) and 41.51 UAH (selling).
Kozyrev notes that this week, most exchange offices of financial companies and banks will operate with a spread of 20–25 kopecks. Wholesale exchange offices will maintain a spread of 15–20 kopecks throughout the week.
“In the cash market, most exchange offices of financial companies and banks will operate this week with a spread (the difference between selling and buying rates. – Ed.) of 20 to 25 kopecks. Wholesale exchange offices will continue to operate every day this week with a spread of 15-20 kopecks”
The week in the currency market of Ukraine is forecasted to be very tense due to a number of global and domestic factors affecting market participants’ sentiments.
Geopolitical, International, and Domestic Influencing Factors
Among the main reasons for volatility, experts note heightened nervousness among investors due to geopolitical and military risks. In particular, the situation is influenced by:
- The conflict between Israel and Iran;
- The escalation of aggression by Russia against Ukraine.
The unpredictability of these risks forces market participants to account for them at the highest level, leading to sharp changes in oil prices and deepening overall instability. Additionally, loud political statements worldwide further increase investors’ nervousness.
An important factor for financial markets will be the meeting of the U.S. Federal Reserve scheduled for June 18. Experts believe that this meeting could determine the further dynamics of the euro/dollar pair and currency markets in general. The main intrigue lies in whether the Fed will decide to start a new cycle of monetary policy easing to support the U.S. economy or postpone this decision, which will affect the interest rate differentials between the U.S. and Europe.
Local factors will also influence the situation. In particular, this week, a significant portion of business payments to the state budget is expected. This factor traditionally supports the hryvnia, as exporters are more active in selling foreign currency earnings, while importers have fewer opportunities to buy currency.
However, a negative impact may arise from insufficient preparation for the upcoming heating season. Gas storage facilities are currently filled significantly less than last year, and gas companies will be purchasing currency for fuel procurement. This creates additional pressure on the hryvnia exchange rate and affects the country’s gold and foreign exchange reserves.