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Daily Insight -- Hryvnia extends its lengthy upward stride

The Ukrainian currency strengthened for the tenth consecutive sessions -- this cements a widely-held perception that macro stability has been achieved. Thus, on Wednesday, the hryvnia hit a new year's high, having closed up 0.1% to 25.5727 USD/UAH. The UAH sold for 25.51 USD/UAH versus 25.72 USD/UAH to buy in the Ukrainian cash market. The hryvnia's CPI-based real trade-weighted index fell 0.12% to 109.84, while in year-on-year terms, up 10.6% from 99.31 last year. Also, yesterday, Goldman Sachs published a report on the UAH forecasting an enduring strengthening trend to extend beyond this December and through the end of 2018 (at 24.8/USD). It may boost positive sentiment toward UAH going forward. At the same time, our in-house analysis signals that a steady increase in the real trade-weighted indices (both CPI- and PPI-based) indicates a market turnaround of the Ukrainian currency is rather possible. Hence, we are skeptical of the possibility of a steady upward trend for the hryvnia lasting over the next 12 months.