UAH steady, USD enjoys recovery signs

Макроэкономика 08.06.2015 The hryvnia closed nearly flat to the previous day at 21.045/USD, according to Bloomberg. Although the NBU declared last week that it has begun to relax capital controls, the FX regime is still tightly regulated. Friday's published inflation statistics for May showed that monthly inflation of 2.2%, implying a 58.4% year-on-year CPI, down 2.5ppt from 60.9% a month ago when inflation spiked on the back of the utilities and natural gas tariff increase and of the recent FX depreciation. High inflation and low FX reserves will prevent authorities from relaxing capital controls to a significant extent as their goal remains to prevent a run on the currency. In the US, the jobs statistic for May was bullish, suggesting that 2Q will be much stronger than 1Q when the economy contracted by 0.7%. The US dollar index jumped 0.89% on Friday. Consensus still sees the US Fed starting to raise the Fed funds' rate this September.