National Bank’s Forecasts on Euro and Dollar Exchange Rates: What to Expect in the Near Future
The country's Central Bank has conducted a comprehensive analysis of the current foreign exchange market situation and provided its predictions regarding the future trends of the euro and dollar exchange rates. According to officials from the National Bank of Ukraine, the primary factor influencing the euro's appreciation against the hryvnia is the weakening of the US dollar relative to other currencies. This scenario is largely linked to the internal and external political developments in the United States, especially following Donald Trump's election as president. A spokesperson for the NBU explained, "The main impacts are driven not so much by trade confrontations as by the rising uncertainty, which has already affected business confidence in various regions." They added that while moderations are observable in the hryvnia-to-dollar rate, the euro is weakening against the dollar amid fluctuations in their exchange rate. The financial regulator highlighted that internal factors such as the balance of payments and the demand for foreign currency within the country also play a role in shaping the hryvnia's rate. Nonetheless, the official exchange rate remains based on the interbank trading, where the US dollar remains the key currency for transactions. Cash exchange rates are determined by demand and supply interactions in the cash segment of the currency market. The NBU further stated that the future course of the hryvnia against the euro will primarily depend on how the dollar and euro exchange rates fluctuate on global markets. These movements are influenced by macroeconomic conditions and the geopolitical situation in the US and the EU, including monetary policy decisions by the Federal Reserve and the European Central Bank. Financial expert Yulia Samayeva notes that the euro is strengthening against the dollar partly due to the ongoing trade tensions between the US and the EU and the market expectation that the European Central Bank will not ease its monetary policy. Additionally, the overall unpredictable economic policy of Donald Trump contributes to the weakening of the US dollar. As a result, the euro is gaining in value globally and in Ukraine, and this trend is likely to continue as long as the US maintains its geopolitical and economic unpredictability.