Over the past week, the hryvnia has strengthened in all segments ukraisnkih the foreign exchange market. Official exchange rate of the dollar decreased from 26.79 to 26.59 UAH 0.7%. The spread between the average selling and average buying has expanded to the week with a 1.2% to 1.7% due to increased market volatility.
“The main reason for continuing with January strengthening of the hryvnia – the excess of foreign currency supply over demand, which provides a favorable external environment for the main export commodities. The national Bank of Ukraine in its inflation report for the first quarter underlines the improving price environment for Ukrainian exporters in the past quarter compared to the fourth quarter of 2016. First of all, we are talking about the increasing steel prices, iron ore and grains”, – says senior analyst “Alpari” Vadim Iosub.
According to the national Bank, since the middle of the second quarter, we can expect the reduction of iron ore from the reduction in its imports by China and increased supply from the USA, Australia and Brazil. Forecast of the regulator means that the hryvnia may continue to grow until at least the middle or even the end of summer.
“What opportunities this forecast gives currency speculators wishing to play the hryvnia exchange rate? Frankly, not much. First, the term reversal is very broad, in addition to the cost of exported raw materials depends on many other factors. Due to the domestic economic situation, further negotiations with the IMF, banking system stability and the situation in the South-East of the country, the reversal can occur both before and after the period designated by the NBU. Second, even if the fall in the dollar will be replaced by its growth, not the fact that the rate of growth will satisfy the appetites of speculators,” says the analyst.
If, during the fixed exchange rate, which is periodically diluted by a sharp devaluation of rational conduct “in any unclear situation, buy the dollar”, but now, at a floating rate, such a tactic has lost its meaning, the expert believes. The floating exchange rate and inflation targeting, among other things, imply a high uncertainty of currency exchange rate fluctuations and make the game against the national currencies of high risk.