Experts elaborate on change in hryvnia forex rate after U.S. elections

Senior research analyst with the Alpari investment company Vadym Iossub has elaborated on a change in the forex rate of the hryvnia against the U.S. dollar following the U.S. elections, saying that Ukraine's national currency may weaken to UAH 30 per dollar in the near future.

"The dollar will trade within UAH 27.9-UAH 29.0 during the month, while the euro will be within UAH 32.6-UAH34.0. The euro forex rate is slightly less predictable and may exceed the limits given strong fluctuations in the currency pair EUR/USD on the global market," the Ukrainian TSN TV news service quoted Iossub as saying on November 4.

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"There's really mixed feelings about the dollar. On the one hand, a stronger dollar is a signal of market confidence in the United States and that's attractive. … On the other hand, a stronger dollar also means a headwind for trade," he said.

Bank of America experts predict the dollar will get stronger. They say the dollar may first weaken if Democrat Joe Biden wins the U.S. presidential election, but then recoup all the losses. Because the policy he proposes is likely to help the economy recover.

Managing Partner at the Capital Times investment company Erik Nayman also believes that Biden's victory "will be negative for the dollar." "If Trump still wins, the dollar may strengthen. Now there is a struggle. The market is not making a final bet, to avoid a mistake made in 2016. Everyone expected Clinton's victory, but it was Trump who won, and everyone had to turn sharply. Most likely, we won't know in the coming days who won. The dollar will be strengthening faster then. The longer the election results are announced, the longer the dollar will be stronger," he said.

Read alsoUkraine's economy to fully recover from coronacrisis in 2022 – NBUNayman also noted that the dollar exchange rate in Ukraine would gradually rise to UAH 30. In addition, the dollar rate is strongly influenced by COVID-19 quarantine. "We need to understand that the worse the situation in the global economy is, the stronger the dollar is. As soon as there are signs that the coronavirus has been defeated, the dollar may weaken," he said.

In his opinion, the situation with the hryvnia is still quite stable. However, there is a slight devaluation in the global trend. "I wouldn't say it's bad now, it could have been worse," he said.

According to Nayman, now Ukraine's Central Bank needs to accelerate the economic policy, and the weakening of the hryvnia facilitates this, supports the Ukrainian economy. "The hryvnia tends to weaken, which will last approximately until early next year," the expert added.