- The hryvnia registers small gains against the euro
- The Ukrainian hryvnia totals 7.6% losses against the euro since the start of 2022
- Eurozone manufacturing activity under the eyes
- Gloomy inflation outlook in the EU
The Euro Hryvnia (UAH/EUR) exchange rate recovered some of its losses on Wednesday. The pair advanced 0.04% yesterday, settling at €0.02992 after hitting a weekly high of €0.03009.
As of 08:00 UTC, UAH/EUR is trading slightly higher by 0.23% at €0.02999.
The Ukrainian currency has lost more than 7.6% against the euro since the beginning of the year. Only about half of the currency’s losses have been recorded since the start of the Russian-Ukrainian conflict.
Elsewhere, dovish comments from the ECB’s Lane put a lid on the euro’s gains. The ECB executive board member downplayed the possibility of too rapid a tightening because he “would be counterproductive… in response to temporarily high inflation.
He added: “if current inflation is above the target level but forecasts show it falling below the target over the projection horizon, tightening would be counterproductive”
Going forward, in terms of risk events, data on manufacturing activity in the Eurozone will weigh on the exchange rate. Markit PMI Composite in the Eurozone is expected to stagnate at 55.8 while the Services PMI in Germany will contract to 56.6.
EU producer prices are also expected to rise to 27% year-on-year from 26.2% previously. The surge in oil prices paints a bleak outlook for inflation, which continues to trend higher.