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The Uganda Shilling gives up recent gains against the U.S dollar

KAMPALA, Uganda–The Uganda shilling gave up previous gains against the U.S dollar on Wednesday after an upsurge in foreign currency demand from commercial banks overshadowed inflows from commodity exporters.

The USDUGX pair was broadly quoted at the 3683/3703 levels from 3680/3700 levels previously. Market sentiment retains forecast for a weaker home currency as dollar supply persistently fails match growing greenback demand.

Yields at yesterday’s auction followed a rising trend. The yield on the 2 year and 5 year papers rose to 11.255% and 12.636% from 11.049 % and 12.572 % respectively. 

The U.S dollar remained under pressure against a basket of major currencies despite a slump in the Canadian dollar as traders fretted dovish comments from a Fed official.

Worry keyed into the U.S markets after St. Louis Federal Reserve President James Bullard did little to help sentiment as he warned of the prospect of an inverted yield curve, a key predictor of a recession within six months.

The Euro rose from earlier losses, with the EUR/USD was up 0.05% to 1.2376. The euro had fallen earlier in the day after data showing that euro area inflation accelerated less than initially estimated last month.

The Cable was down 0.39% to 1.4232 after data showed that U.K inflation fell to 2.5% in March, its lowest levels in a year.