As analysts of the multiservice FinTech company KIT Group explain, this indicator will form at least a medium-term trend for the dollar, euro, gold, stocks, and cryptocurrencies, determining which assets global capital will move into.
As KIT Group analysts note, the Fed rate is not just accounting or investment mathematics, but also psychology. The rate value determines whether investors are willing to invest in risky instruments or, conversely, will seek safe havens to preserve capital. This mood switch explains why one week the world massively buys Bitcoin, and the next week it hides in the dollar or gold again.
Analysts consider two scenarios to be the most likely: a rate cut under pressure from the Trump administration to stimulate the economy, or maintaining it at the current level. And each of these options will affect market dynamics and exchange rates, which are important for Ukrainians, in different ways.
When the rate is lowered
If the Fed cuts the rate, the dollar weakens, as holding it at interest becomes less profitable. Demand for the currency falls, and at this moment other currencies seem more attractive. Stocks, on the contrary, receive a powerful boost upward, because cheap money stimulates businesses to expand, and investors can count on additional profits. A similar dynamic is observed in the cryptocurrency market: Bitcoin and altcoins grow due to increased demand even without fundamental news. Gold, as usual, recedes into the background, because in periods of cheap money it is less interesting for short- and medium-term investment earnings.
A Fed rate cut triggers a rally in risky assets. For Ukrainians, this means: it is worth looking at the euro and cryptocurrencies, while gold is better considered as a long-term insurance instrument, explain KIT Group.
In practical terms, this could look like this: the euro exchange rate against the dollar reaches 1.19–1.20, the dollar in Ukraine weakens to 41.20–41.40 UAH/$, and the euro strengthens to 49.00–49.20 UAH/€. Those who have investments in the American stock market can expect positive news, and gold owners should consider whether it is time to lock in profits before investors' interest shifts to other assets.
When the rate is unchanged
However, there is a slight possibility that the Fed may leave the rate at its current level. In such a scenario, the dollar will remain stable, stocks will move inertially on fundamental indicators, cryptocurrencies will fluctuate in a "sideways trend," and gold will retain its role as a safe-haven asset.
For the Ukrainian market, this means that the dollar exchange rate will remain in the range of 41.70–42.00 UAH/$, and the euro will fluctuate within 47.70–48.00 UAH/€.
During periods of unchanged rates, the best strategy for Ukrainians is to adhere to an already formed financial plan and strategy, but at the same time carefully monitor macroeconomic publications in the US and the EU, as they can become a trigger for situational fluctuations, warn KIT Group.
Historical experience
KIT Group analysts remind: in 2020–2021, the Fed lowered the rate almost to zero, which led to a surge in technology stocks and a record rise in Bitcoin. In 2022, when the rate had to be raised due to inflation, risky asset markets sharply declined. And in 2023–2024, the unchanged high rate led to a "sideways trend," when markets balanced between fear of collapse and hope for growth.
Thus, the Fed's decision in the coming days will be a signal for Ukrainians on which currency or asset to save in and how to reallocate their investment portfolio.
And although it is impossible to predict all situations 100%, understanding the logic of cheap money will help build your own strategy and avoid chaotic actions in search of quick profits.