Overview and Forecast of the Hryvnia’s Exchange Rate Against Major Currencies by KYT Group Analysts

Issue No. 2 – June 2026

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

In June, the hryvnia continued to depreciate, but by the end of the month, the official exchange rate did not exceed 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 disbursement 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 due to 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 impact of the dollar’s strengthening 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 strategy 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, 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, against the backdrop of 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 growing, 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/$. 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 within the range of 51.15–51.65 UAH/€ in Ukraine.

· 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 structuring 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 also offers 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 interest 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.

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