Review and Forecast of the Hryvnia Exchange Rate Against Key Currencies by KYT Group Analysts

Issue No. 1 – June 2026

Analysis of the Current Situation in Ukraine’s Foreign Exchange Market

In the first half of June, the hryvnia continues to depreciate, while demand for foreign currency is rising. The official dollar exchange rate has come very close to the psychological threshold of 45 UAH, and on the over-the-counter foreign exchange market in mid-June, the selling rate had already reached 45.0–45.30 UAH/USD in some cases.

There is no foreign currency shortage, as the National Bank continues to act as the main seller, fulfilling importers’ requests. However, the devaluation fluctuations are fundamentally driven by the trade deficit, as imports significantly outstrip exports; consequently, importers almost always obtain foreign currency exclusively from the NBU. Energy equipment, fuel, and military exports are the main import categories that constantly require significant amounts of foreign currency. Since the beginning of 2026, the NBU has not purchased a single dollar on the interbank market, while the volume of selling interventions has exceeded $18.26 billion. Pressure on the hryvnia is mounting, and the main source of its weakening could be proceeds from the sale of the new grain harvest, followed by the transfer of foreign currency proceeds to importers’ accounts in Ukraine. However, there is still no certainty that the upcoming harvest will bring significant foreign currency inflows to the interbank market or that, as early as this summer, agricultural producers will help the foreign exchange market and bring stability to the national currency.

Global Context

In June, markets are awaiting the U.S. Federal Reserve’s decision on the key interest rate. Previously, investors expected the rate to be cut twice this year, but given the acceleration of inflation in the U.S. due to the war in Iran, these forecasts have already been revised. The Federal Reserve Committee meeting will take place on June 16–17, and the Fed is currently expected to keep rates at their current level: between 3.5% and 3.75%. Interestingly, some analysts are predicting that the next rate cut will not occur until at least 2027. For example, Goldman Sachs believes that the Fed will lower the federal funds rate in June and December of next year to a range of 3–3.25%.

As for the factors that may guide the Federal Open Market Committee when making rate decisions, the key ones are traditionally the state of the labor market and price trends. The latest U.S. labor market data show that in May, the country’s economy added 172,000 jobs, significantly exceeding market expectations. The unemployment rate remained stable at approximately 4.3%, while average hourly earnings rose by 0.3% compared to the previous month and by 3.4% year-over-year. Thus, the stable labor market provides a basis for keeping rates at their current level. As for inflation, new U.S. CPI data for May showed a 0.5% increase compared to April, while annual inflation accelerated to 4.2%. The rise in prices is attributed to energy shocks caused by tensions in the Middle East, rising oil prices, and high transportation risks.

The situation in the Middle East has long driven both investor sentiment and exchange rate fluctuations in the currency markets, but now news has finally emerged of an agreement between the U.S. and Iran that is expected to end the blockade of Iranian ports, reopen the Strait of Hormuz, and facilitate safe shipping in the region. The final signing of the agreement is expected as early as this week in Geneva.

Meanwhile, the European Central Bank raised interest rates last week in an effort to curb price increases caused by the war between the U.S., Israel, and Iran. Consequently, the key interest rate rose from 2% to 2.25%. This is the ECB’s first rate hike since September 2023. ECB President Christine Lagarde noted that the war in the Middle East is creating inflationary pressure, and the decision to raise rates is consistent with a range of scenarios reflecting the possible evolution of this shock and its impact on the eurozone’s medium-term outlook.

As for the U.S. dollar, the DXY index showed a monthly appreciation of nearly 0.6%. But the euro is still coming out on top in June: against the backdrop of news about the agreement between the U.S. and Iran and the ECB’s recent decision to raise rates, the EUR/USD exchange rate reached 1.1611 per euro on June 15, whereas on June 8, the rate stood at 1.1502 per euro. Investors are now focused on the Federal Reserve Committee meeting, the outcome of which will be crucial for the future exchange rate dynamics of the EUR/USD pair.

The Domestic Ukrainian Context

In June, demand for foreign currency from importers increased, while currency sellers—exporting companies—decided to hold onto their proceeds amid the dollar’s appreciation. As a result, the National Bank sold $766.4 million during the first week of June and $1.15 billion during the second week of the month. Pressure on the hryvnia was also intensified by the situation on the international market and expectations of an agreement between Iran and the U.S. As of June 16, the official exchange rate stood at 44.81 UAH/USD, which is lower than the rate on June 11, when it reached 44.97 UAH/USD. This indicates a slight strengthening of the hryvnia. On the cash market, the exchange rate began to fluctuate rapidly, but there is no panic. By increasing its interventions, the NBU signaled its unwillingness to accept a new exchange rate level—above 45 UAH/USD—but further exchange rate fluctuations beyond this psychological threshold are quite likely as early as June.

Importantly, as of early June, Ukraine’s international reserves, according to preliminary data, stood at $45.72 billion, which is 5.2% less than at the beginning of May. The NBU explained that this trend is due to the National Bank’s foreign exchange interventions and the country’s debt payments in foreign currency. These transactions exceeded the proceeds from the placement of foreign-currency government bonds and from international partners.

In June, Ukraine began receiving fairly large amounts of financial support. First, this includes the seventh tranche of funding from the European Union under the Ukraine Facility program, amounting to 2.8 billion euros. As Prime Minister Yulia Svyrydenko explained, the funds will be used to finance priority expenditures in the state budget, particularly social and humanitarian needs. Second, Ukraine is expected to receive the first tranche of 5.9 billion euros from the EU this month as part of a 90-billion-euro loan program. According to EU High Representative for Foreign Affairs and Security Policy Kaja Kallas, the first funds under the program will be used to purchase unmanned aerial systems, that is, for defense needs.

The news of the successful continuation of Ukraine’s cooperation with the IMF also adds to the optimism. It was recently announced that Ukraine and the International Monetary Fund have agreed at the expert level to revise the Extended Fund Facility (EFF) program, and the agreement is expected to be approved in the coming weeks. According to Yulia Svyrydenko, this paves the way for Ukraine to receive the next tranche under the program, amounting to $690 million.

U.S. Dollar Exchange Rate: Trends and Analysis

The gradual devaluation of the hryvnia is in line with the principles of an exchange rate flexibility strategy. Thus, while the official exchange rate stood at 44.27 UAH/USD in early June, it reached 44.81 UAH/USD on June 16. On the interbank market on June 15, trading took place at a rate of 44.8–44.83 UAH/USD. As before, the National Bank remains the main seller of foreign currency.

As expected, the cash market is moving forward, pushing the hryvnia beyond the psychological threshold of 45 UAH/USD. In early June, the buying rate ranged from 43.85 to 44.05 UAH/USD, while the selling rate was 44.4–44.6 UAH/USD. By mid-month, the buying rate had risen to 44.5–44.7 UAH/USD, and the selling rate to 45.0–45.3 UAH/USD. Spreads narrowed slightly to 0.45–0.6 UAH/USD.

Key influencing factors:

· Rising demand for the dollar on the interbank foreign exchange market in June and active fluctuations toward devaluation. The hryvnia continues on a depreciation trajectory; the NBU is selling currency to importers, while exporters are holding onto their proceeds.

· Cash market: the 45 UAH/USD threshold has been crossed. There is no panic on the cash market, but the public expects further depreciation, and demand for dollars is growing;

· International factors: U.S. President Donald Trump announced the conclusion of an agreement with Iran, which, as expected, bolstered the euro, as investors’ confidence in the euro and the EU economy—which relies on imported energy—increased;

· Market sentiment: In mid-June, attention in international markets is focused on the Federal Reserve’s policy meeting, although forecasts indicate that there will be no change in interest rates. In Ukraine, despite positive news regarding the arrival of billions in financial aid, the hryvnia will remain under pressure from high demand, and this trend will continue in the coming weeks.

Forecast

· Short term (1–2 weeks): base range of 44.95–45.35 UAH/USD; the hryvnia will attempt from time to time to return to a level around 44.85 UAH/USD, but the overall trend is toward depreciation.

· Medium term (2–3 months): 45.15–45.70 UAH/USD. If the euro continues to strengthen amid a rebound in investor confidence following the resolution of the conflict in the Middle East, fluctuations against the dollar may be more subdued. However, the Fed’s future policy and decisions regarding changes to the key interest rate will be significant.

· Long term (6+ months): In the baseline scenario, the depreciation trend remains the main one, and the exchange rate may cross the 46.50 UAH/USD threshold toward the end of the year. The most important factors influencing exchange rate fluctuations are the National Bank’s strategy of supporting the foreign exchange market through interventions, further liberalization of the foreign exchange market, grain exports, as well as the volume and regularity of international aid inflows.

Euro Exchange Rate: Trends and Analysis

The euro resumed its appreciation on the domestic foreign exchange market after a temporary decline in May. While the official exchange rate stood at 51.55 UAH/EUR at the beginning of June, it reached 52.04 UAH/EUR by mid-month. The main driver of these exchange rate changes was the trend toward a strengthening euro on the international market.

The cash market reacted logically to the euro’s strengthening. Thus, while the buying rate ranged from 50.85 to 51.3 UAH/euro in early June,

and the selling rate was 51.75–51.90 UAH/EUR, by mid-June the buying rate for the euro had already reached 51.25–51.70 UAH/EUR, and the selling rate was 52.25–52.55 UAH/EUR. Spreads remained virtually unchanged at 0.6–0.9 UAH/EUR.

Key influencing factors:

· The euro has strengthened significantly on the international market, driven by geopolitical events and changes in ECB interest rates. In June, the euro strengthened thanks to investor optimism following the announcement of an agreement between the U.S. and Iran.

· The ECB raised interest rates in response to rising inflation caused by the war in Iran. Specifically, it raised its main deposit rate from 2% to 2.25%. Inflation in the Eurozone rose to 3.2% in May 2026 from 3% in April. The ECB’s inflation target is 2%.

· Demand for the euro in Ukraine remains low. There is no shortage of euros in the cash market, and sales of the euro by the public outweigh purchases.

Forecast

· Short term (2–4 weeks): On the Ukrainian market, the euro may remain within the range of 52.10–52.45 UAH/euro.

· Medium term (2–4 months): if the euro continues to strengthen on the international market, the euro may fluctuate within the range of 52.20–52.60 UAH/euro in Ukraine.

· Long term (6+ months): the euro exchange rate may remain within the range of 52.50–54.50 UAH/euro. Key influencing factors include the Fed’s interest rate decisions, inflation rates in the U.S. and the EU, and geopolitical issues—specifically, the implementation of the peace agreement between the U.S. and Iran.

Recommendations for Businesses and Investors

June saw an acceleration in exchange rate fluctuations. The main trend toward hryvnia depreciation has already been established, which means investors should stick to their currency strategies by investing in liquid foreign currency assets.

The Fed is assessing the stable U.S. labor market, which may prompt the regulator to keep interest rates unchanged at least until mid-fall. For investors, this means continued volatility in the euro/dollar pair, with alternating movements toward strengthening of either the euro or the dollar. A sound strategy at this time involves investing in both major currencies.

The situation in the Middle East will continue to influence exchange rates even after the signing of an agreement between the U.S. and Iran. Global risks will determine the level of confidence in the major currencies, but for now, the euro has a better chance of strengthening its position.

Safe investments are the foundation of every currency portfolio. Now is not the time to bet on the hryvnia; the national currency can be used temporarily for certain speculative transactions, but foreign currency cash should be the focus of safe investments this summer.

The key is liquidity. The world’s major currencies—the dollar and the euro—should account for the largest share of a currency portfolio. The currency allocation depends on the investor’s individual strategy and specific priorities, but the optimal distribution is to hold 60% of assets in dollars and 40% in other liquid currencies.

Other European currencies should serve as a safety net, not as the main component of your investments. To diversify your currency portfolio, you can hold about 15% in British pounds and 10% in Swiss francs.

Short-term hryvnia investments in government bonds or deposits are possible, but only for terms of up to 3 months. A small portion of funds—up to 10% of total assets—can be held for income from hryvnia-denominated securities or deposits; however, you shouldn’t count on high returns: the NBU’s strategy does not anticipate an increase in the value of money.

The focus is on decisions by the U.S. and EU central banks and on updated inflation data. A thorough analysis of the economic situation in the Eurozone and the U.S. will allow you to adjust and successfully update your long-term foreign currency savings strategy in a timely manner.

The geopolitical situation is a significant factor influencing strategy. The successful signing of an agreement between the U.S. and Iran sets the stage for further strengthening of the euro, since the EU is particularly dependent on imported energy resources; thus, the opening of the Strait of Hormuz will primarily affect the price of oil and fuel on the European market, and the euro will strengthen its position.

What’s important in the news. It is necessary to monitor everything related to the Federal Reserve Committee’s decisions, as well as announcements from the ECB and information on inflation and labor markets in the U.S. and the Eurozone. It is also important to analyze the signing of the agreement between the U.S. and Iran and changes in the price trajectory on the oil market. In Ukraine, the main factors influencing the situation on the foreign exchange market will be massive enemy attacks, potential damage to infrastructure, the state of the energy sector, news from partners, and the state of international reserves.

This material was prepared by analysts at KYT Group, an international multi-service FinTech platform, and reflects their expert, analytical, and professional judgment. The information presented in this review is for informational purposes only and should not be construed as a recommendation for action.

The company and its analysts make no representations and assume no liability for any consequences arising from the use of this information. All information is provided “as is,” without any additional guarantees of completeness, or any obligations regarding timeliness, updates, or additions.

Users of this material should independently assess risks and make informed decisions based on their own evaluation and analysis of the situation using various available sources that they themselves deem sufficiently reliable. We recommend consulting with an independent financial advisor before making any investment decisions.

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