International context
The world currency market in the first half of November was influenced by several important factors. The first was the October reduction of the Fed’s rate by 25 basis points to the range of 3.75-4%. The second is the expectation of fresh statistics on the US labour market and the resumption of the US government work. In addition, investors and EUR/USD currency fluctuations were influenced by expectations of the next step of the Fed Committee – another key rate cut is expected in December.
If the rate cut at the end of October was already embedded in the exchange rate fluctuations, the data on the labour market worried investors. And, as it turned out, not in vain. Recall that at a briefing on October 29, the head of the Fed Jerome Powell said that the conditions in the U.S. labour market are cooling. In November, this was also confirmed by statistics: according to ADP, American companies cut more than 11 thousand jobs every week until the end of October, indicating a weakening labour market. Although preliminary data showed that the US created a total of 42 thousand new jobs in October compared to September, ADP noted that the labour market struggled to create jobs in the second half of October. This leads analysts and traders to believe that the Fed should go for another key rate cut in December.
These factors influenced the exchange rate behaviour of the dollar, which in the first half of November initially strengthened on positive expectations and reached 1.1473 on November 5, but then the dollar started to weaken and as of November 14 the exchange rate actually returned to what it was on the eve of the Fed Committee meeting in October – 1.1625. New statistical data on the labour market, negative expectations of further cooling of the market due to government layoffs, as well as the forecast of further rate cuts played against the dollar.
Another factor influencing the currency market is the relations between the US and the PRC, but here so far without stress. On 10 November, China announced that it is fulfilling its promise to combat chemicals that can be used to produce fentanyl, which, remember, was a key issue for US President Donald Trump during talks in October with Chinese leader Xi Jinping. China has already announced new export restrictions on 13 chemicals to the United States, Canada and Mexico. Improving relations between the US and China will definitely influence the strengthening of the US dollar.
Meanwhile, in the middle of November, the Euro currency shows strengthening, also due to the conservative policy of the European Central Bank, which in late October left rates unchanged, stating that inflation in the eurozone remains under control. All three key interest rates were kept unchanged. According to the ECB, eurozone inflation remains close to the medium-term target of 2 per cent. The overall assessment of the ECB’s council of governors regarding the inflation outlook is broadly unchanged. It is true that the EU is talking about global challenges and uncertainty due to tariffs and geopolitical tensions. These factors remain the main risks for the euro area economy at the end of 2025.
Domestic Ukrainian context
Exchange rate fluctuations were noticeable in the Ukrainian currency market in early November, and the trend of devaluation of the national currency persists. However, the participation of the National Bank of Ukraine in interventions has a stabilising effect. Since the beginning of November, the hryvnia has been gradually weakening against the dollar: as of 1 November, the official exchange rate was at 41.97 UAH/dollar, and as of 14 November – 42.06 UAH/dollar. In the cash market fluctuations are also present, but rather insignificant: in the middle of November the average selling rate was UAH 42.30/USD, while at the beginning of the month it was UAH 42.14/USD.
The demand for currency continues to be at a high level. The growth of demand was also recorded in October. According to the NBU data, it concerned both the Interbank foreign exchange market and the cash segment. In total, last month, the National Bank increased interventions in the interbank market by 27.3% or $625.3 million – up to $2.915 billion. According to the regulator, the population in October purchased cash dollars by $162 million more than in September – the total amount of currency purchase was $1.458 billion.
If we analyse the net purchase of currency by the population, the amount in October is twice as much as in September – $0.75 billion last month against $0.38 billion in September. Such a trend is quite expected. It is highly likely to continue during November, as the internal situation in the country remains tense due to regular attacks of the Russian Federation, and the schedules of power cuts caused by enemy attacks add to the need to purchase imported equipment, which may pressure the demand for foreign currency on the interbank market, as well as to the issue of formation of savings by the population, which is reflected in the cash segment