KAMPALA, Uganda–The Uganda Shilling was broadly stable at the 3755/3775 levels against the U.S dollar throughout Wednesday’s trading session amidst an unforeseen uptick in demand for local currency in the money market arena.
Overnight interbank rates printed weighted average rates of 13.5 per cent from 7.5 per cent the previous day. On the last trading day of May, further depreciation of the local currency remains on the cards as hard currency demand from key players in the energy sector continues to roar alongside muted dollar supply activity.
The U.S dollar traded lower against the major currencies after renewed tension between the U.S and China amidst a recovery in the Euro. A ratcheting up of the trade row between the U.S. and China kept investors on edge after U.S. President Donald Trump, announced that the U.S. would be proceeding with $50 billion worth of tariffs on Chinese imports.
The Euro rebounded from ten month lows against the greenback on Wednesday supported by upbeat inflation data in German as financial markets recovered from a steep selloff sparked by political turmoil in Italy.
The recovery in the euro came despite ongoing uncertainty over the outlook for Italy during fresh attempts by the anti-establishment Five Star and Lega parties to revive their coalition plans.
The Pound pushed higher, with GBP/USD adding on 0.26% to trade at 1.3285 after hitting a six-month low of 1.3203 the day earlier.