In Ukraine the value of the dollar has been declining for several months. While the traditional autumn devaluation of the hryvnia has not begun. Moreover, the exchange rate gradually strengthened and can achieve a four-year record. Currency forecast at the beginning of October
The second month of autumn will begin with a gradual strengthening of the hryvnia.Analysts agree: either the dollar will fall to a new record, or will remain in a stable range. It comes amid record volume of purchases of Ukrainian debt securities (government bonds) from foreigners.
Analyst Vadim Iosub explains: in addition to buying government bonds, there are other reasons to strengthen. The balance of demand and supply in the market allows you to gradually reduce the value of the currency. The national Bank tries to slow down this trend.
“Strengthening of the hryvnia contributed to last Tuesday’s auction the Ministry of Finance of government bonds, thanks to which managed to attract UAH 13.2 bn. However, the non-residents demand for government bonds is not the only reason to strengthen the hryvnia. This is evidenced by the fact that after this auction, the last for this month, on Wednesday and Thursday, the hryvnia continued to strengthen,” – says the expert.
According to the estimates of Yasuba, the dollar to 5 Oct may reach a record since December 2015 level 23.7 UAH/$. For the coming week experts predict the Bank rate of 23.5 cm/2,8 UAH/$.
“Last week the dollar dropped significantly against the national currency on all segments of the foreign exchange market 1.7-2.2 percent. So, since last Thursday, the official rate of dollar established by the NBU, decreased from 24.67 to 24.12 UAH UAH (down 2.2%). Demand/supply of the dollar on the interbank market, according to the company “Ukrdealing”, for the same period decreased from 24.55/24,58 to 24.13/24,16,” notes the analyst.
Less positive Outlook voiced by the head of Department of Analytics Forex Club Andrey Shevchishin. He believes that, most likely, the dollar will be within the current mark.
“This is happening against the backdrop of the fact that the national Bank of Ukraine held a final meeting with the mission of the International monetary Fund about financial support to the country. Probably in the short term, the hryvnia will remain stable and will trade in the range 24-24,1 grn. for a dollar, “predicts Shevchishin.
Analyst Yegor Komov believes that the trend towards the strengthening and the situation in the foreign exchange market will allow the national currency to test the new psychological mark of 24 UAH/$. “Now we see in the market is very positive situation. There are risks of default budget and I think that the national Bank can partly mitigate the decline of the dollar. But most likely the mark about 24 UAH/$ in the next week we will test, “- said the expert.
Currency war is postponed
For several months, economists around the world predict a new currency war. The reason – the struggle between China and the United States. On 9 August, us President, Donald trump told reporters that he would not reduce the dollar in response to the weakening of China’s yuan. “No, we do not need. We have such a strong dollar, the safest currency in the world. We set the standard around the world,” he said.
At the same time, trump said that if the Federal reserve lowers rates, the dollar is “a little” will fall, which will automatically reduce the pressure on exporters. However, according to him, it is not necessary to make such a decision.
This statement was quite unexpected, considering that a day earlier, the head of the White house in his Twitter wrote: “You might think, as your President I will be happy that our dollar is very strong. But I’m not happy! High interest rates in comparison with other countries holding our dollar too high. And this creates great difficulties for our great manufacturers such as Caterpillar, Boeing, John Deere, our automotive and other companies could compete in uniform for all conditions.”
The United States understands that their sanctions and fees China will react mirror measures, but America also needs to realize where their goods and services, and the Chinese market is one of the largest. Accordingly, the issue of the devaluation of the exchange rate and lower interest rates will become an afterthought, if Washington and Beijing can agree.
“By the way, the news about the postponement of the duties already reacted to the gold price, which fell from $1530 to $1490 per Troy ounce. Reacted oil, which has risen in price from $53 per barrel to $58-59,” said financial analyst Vasyl nevmerzhytskiy.
If the US and China fail to agree, and the script with the weakening of the dollar will become a reality in the first place it will impact on Ukrainian exports, which depend on the rate fluctuations and interest rates, explains nevmerzhitskiy.