UAH/EUR: Ukrainian hryvnia restores gains in slow trade


  • Ukrainian hryvnia slightly down against the euro
  • Germany opposes Russian embargo on energy imports
  • The ECB should lean towards the dovish side
  • Eurozone GDP and unemployment change the data

The Euro Hryvnia (UAH/EUR) exchange rate pared its losses to post its first weekly gains in two weeks. The pair gained +1.31% last week, settling at €0.02992, towards the high of the week. At 08:07 UTC, the UAH/EUR traded down slightly by -0.03% to €0.0308.

Risk sentiment improved after Germany opposed sanctions aimed at blocking oil and gas imports from Russia. German Chancellor Olaf Scholz’s comments on Russia’s energy imports boosted demand for the euro.

Germany’s industrial and retail sales improved in January but failed to improve sentiment around a depressed euro. Retail sales rose 10.3% year on year from 0.8% on the previous reading, while at the same time factory orders rose 7.3% year on year from 5.9 % on previous reading.

Given the heightened uncertainty, the European Central Bank should lean more towards the dovish side. The ECB should end the PEPP program in the third quarter but, at the same time, wait for the rate hike until the end of the year.

Despite galloping inflation, the Russian-Ukrainian conflict will weigh on the ECB’s flexibility to raise rates earlier.

Looking ahead, Eurozone GDP growth is expected to slow to 4.6% in the last quarter of 2021. Another data for investors to watch will be the employment growth figures which are expected to increase by 2 .1% in the fourth quarter of 2021.


Previous GBP/EUR: Stable pair ahead of Eurozone GDP data
Next Kitron postpones presentation on capital markets