Overview and forecast of the hryvnia exchange rate against key currencies from KYT Group analysts

Issue #2 - September 2025

The purpose of this review is to provide an analysis of the current situation on the Ukrainian currency market and forecast the hryvnia exchange rate against key currencies based on the latest data. We analyze current conditions, market dynamics, key influencing factors, and likely scenarios.

Analysis of the current situation on the currency market

International context

The first half of September was marked by expectations of decisions by the world's leading central banks. In the United States, markets were expecting policy easing at the beginning of the month: inflation rose only slightly, and the labor market showed a gradual cooling. This prompted investors to lay a high probability of a rate cut by the Federal Reserve. As a result, the dollar weakened, while the euro recovered even without its own drivers, only due to pressure on the US currency.

The European Central Bank, for its part, left its policy unchanged: inflation is stable at around 2%, the economy is growing slowly, and there are no new reasons for the euro to break out. Oil and gas prices remained in relative balance in August-September, creating no additional risks or opportunities for the EU currency.

The key external factor for the FX markets in the coming weeks will be further signals from the Fed and the ECB.

New data on inflation and the US labor market remain key benchmarks for the Federal Reserve. If the rate of price growth remains within forecasts and employment continues to cool, this will strengthen the case for easing policy in the near future. On the contrary, a sudden jump in prices or unexpectedly strong employment figures could force the Fed to wait and take its time with rate cuts.

For the European Central Bank, the main benchmarks remain inflation in the eurozone and the growth rates of the economies of Germany and France. If inflation continues to hover around 2%, the ECB will maintain a pause. Any acceleration of inflationary processes could become a brake on further money depreciation.

Thus, in the coming weeks, it will be the macro data from the US and the EU that will determine sentiment on the global FX market. For the hryvnia, this means that the dollar and euro exchange rates against the national currency will remain influenced by external signals rather than internal factors.

If the US confirms its course for a new wave of easing, the dollar will lose some more support, and the euro may strengthen further. If the Fed decides to keep rates on hold longer, the dollar will get a short-term boost.

For Ukraine, this will mean that both key currency pairs (USD/UAH and EUR/UAH) will continue to fluctuate primarily in response to external signals.

Domestic Ukrainian context

The NBU continues to maintain control over the market: reserves remain at record levels, and the official hryvnia exchange rate is gradually strengthening. The cash market moves in sync with each other without deviations, and bid-ask spreads remain stable.

This confirms that in recent months, the Ukrainian foreign exchange market has maintained a balance and a kind of “exchange rate consensus” between the regulator, foreign exchange market operators, and export-import businesses.

An additional marker is the average annual exchange rate of 45.6 UAH/USD set by the government in the draft budget for 2026. This benchmark almost coincides with business expectations for the next year (46 UAH/USD) and shows the consensus of both the government and the market in the medium term towards controlled devaluation with almost flat dynamics rather than hryvnia strengthening.

There are currently no internal factors that can radically change the situation in the coming weeks. All key drivers are of external origin. If the dollar weakens globally, the hryvnia will have an additional chance to strengthen; if the dollar pulls back, the Ukrainian market will feel it very quickly.

The strategic stability of the Ukrainian currency market, as well as the economy's ability to withstand the pressure of the war's aftermath, is enhanced by the willingness of international partners to financially support the country, as well as intensive discussions in the EU about mechanisms for financing Ukraine with frozen Russian funds.

US dollar exchange rate: dynamics and analysis

General characteristics of market behavior

At the end of September, the dollar demonstrated a gradual upward reversal after several weeks of flat sliding. While at the beginning of the month the market was in the range of UAH 41.00-41.30/$, the last few days have been marked by a synchronized rise in both buying and selling, and the official NBU rate.

In fact, the market has moved into a correction phase, testing the upper limits of the usual range: all exchange rate indicators have moved up simultaneously, signaling that the intensity of transactions and demand are gradually increasing. Operators reflect this in their quotes. This trend is likely to continue into October, with the dollar moving smoothly along an almost flat trajectory without any sharp movements.

Despite the smooth growth of the dollar, spreads remain stable (0.40-0.50 UAH/$), which reflects the controllability of the market and the absence of sharp distortions that can dramatically change the market situation.

Key factors of influence

• International context. After the Fed's actual rate cut in September, markets have already priced in a “cheaper” dollar. Now, the focus is on further actions by the Fed and the ECB by the end of the year, which will be triggered by macro data (inflation, labor market, etc.).
• Domestic situation. The NBU's reserves remain high, which ensures that the regulator has the resources to smooth out fluctuations. Demand from households for the dollar is restrained, and import payments, as well as household behavior, do not create a critical burden.

Forecast.

• In the short term (1-2 weeks): the basic band is UAH 41.20-41.70/$ with likely fluctuations and a tendency to the upper limit.
• Medium-term (2-3 months): 41.30-42.00 UAH/$. If the Fed or the ECB give new signals on rates, it is possible to go beyond this range.
• Longer term (6+ months): The baseline scenario of a smooth hryvnia devaluation remains in place. The benchmark is 43.00-44.50 UAH/$ by mid-2026.

Euro exchange rate: dynamics and analysis

General characteristics of market behavior

The euro showed steady growth on the Ukrainian market in September. On a monthly retrospective horizon, quotes rose by an average of UAH 0.40-0.50 per euro.

Despite the multidirectional fluctuations in the euro, the main focus should be on the spread, which has widened significantly in relation to buying, signaling a decline in demand from the population.

Key observations

Ø Exchange rate geometry:

o The selling rate has been steadily pulling upward, laying the groundwork for further growth.

o The buying rate is moving away from the NBU's official rate - market operators are no longer willing to buy back euros from clients at “premium” prices, as demand has declined.

Ø Supply and demand:

o Demand for cash euros has cooled significantly after the summer peak, as seen in the reduction in purchase volumes.

o The supply of euros from households remains strong, which is why purchase rates are being pushed to the lower bound.

Influence of external factors:

- The euro is supported solely by a weaker dollar, with no growth drivers of its own.

- Expectations of the Fed and ECB rate decisions in October and November remain the main risk/potential factor for the EUR/USD pair and, accordingly, for the EUR/UAH exchange rate.

Forecast.

• Short-term (1-2 weeks): the range of 48.30-49.20 UAH/€, with possible pullbacks on the buy side to 48.00 UAH/€ and short sell exits to 49.30 UAH/€.
• Medium-term (2-3 months): the basic corridor is UAH 48.50-49.50/€, with a potential upward movement to UAH 50.00/€ in the event of another Fed rate cut.
• Longer term (6+ months): the euro's strengthening trend against the dollar may keep quotes in the range of 49.50-51.00 UAH/€, depending on the ECB's policy and the European economic recovery.

Recommendations: dollar or euro - buy, sell, or wait?

USD/UAH

The dollar entered a corrective recovery phase at the end of September, but globally, the market has already priced in a “cheaper” dollar after the September Fed rate cut.

This means that there is limited room for a large-scale decline, and the dynamics will continue to depend on new macro data and signals from Washington.

There is no need to fundamentally shift the structure of savings in favor of the dollar at this time, as liquidity is more important than fixing the exchange rate. The best strategy is to gradually diversify your purchases in small tranches to build up a reserve.

It is advisable to sell the dollar only in the event of short upward spikes after decisions or signals from the Fed, as they can provide so-called time windows for profitable profit-taking.

For speculative operations, it is best to work with short positions and clear stops. The current corridors of 41.20-41.70 UAH/$ allow you to catch small fluctuations, but do not count on sharp jumps. Macro signals from the US or the EU can provoke short impulses that will bring benefits on quick trades.

EUR/UAH

The euro is holding steady on the Ukrainian market: sales are pulling up, while purchases are pressing against the official NBU exchange rate.

At the same time, the potential for further euro growth remains, primarily if the Fed continues to ease and the ECB is in no hurry to change its policy.

It is now possible to buy euros in small installments, especially for those planning to spend in the eurozone or diversify their portfolios. At the same time, you shouldn't chase short peaks - it's better to act in a planned manner and have liquidity to maneuver.

It makes little sense to sell the euro at current levels, as the upside potential (up to UAH 49.5-50/€ in the coming months) exceeds the risks of a pullback.

For speculative operations, the euro remains more attractive due to its higher elasticity: selling moves up, while buying stays down, creating a wider space for playing on fluctuations. To take advantage of this, you can expect the rate to rise to 49.5-50 UAH/€, and before or on the days of macro data releases, you should focus on short entry/exit trades.

Overall strategy

Now is clearly not the time to bet on one currency. Both the dollar and the euro remain influenced by external signals. The dynamics of macro data in key economies may become a trigger for the Fed and the ECB, which will determine where the exchange rate pendulum will swing next.

The basis of the strategy is to maintain liquidity and flexibility. Buy in tranches, sell only at peaks, and plan transactions in ranges rather than points.

In the medium and long term, there is a stable consensus between the government and business in favor of controlled devaluation, so the currency as a basic asset for saving savings retains its value.

This material was prepared by analysts of the international multiservice product FinTech platform KYT Group and reflects their expert, analytical professional judgment. The information presented in this review is for informational purposes only and cannot be considered 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 warranties of completeness, obligations of timeliness or to update or supplement.

Users of this material should make their own risk assessment and informed decisions based on their own evaluation and analysis of the situation from various available sources that they consider to be sufficiently qualified. We recommend that you consult an independent financial advisor before making any investment decisions.

REFERENCE

KYT Group is an international multi-service product FinTech platform that has been successfully operating in the non-banking financial services market for 16 years. One of the company's flagship activities is currency exchange. KYT Group is one of the largest operators in this segment of the financial market of Ukraine, is included in the list of the largest taxpayers, and is one of the industry leaders in terms of asset growth and equity.

More than 90 branches in 16 major cities of Ukraine are located in convenient locations for customers and have modern equipment for the convenience, security and confidentiality of each transaction.

The company's activities comply with the regulatory requirements of the NBU. KYT Group adheres to EU standards, having a branch in Poland and planning cross-border expansion to European countries.