Markets

The Uganda Shilling’s strength against the dollar extends to Thursday

BY CBA

KAMPALA, Uganda–The Uganda shilling continues to gain against the U.S. dollar as greenback demand maintains it’s low-slung amidst relatively skewed liquidity in the money market. The USD/UGX pair levelled at the 3835/3855 levels on Thursday from 3840/3860 on Wednesday.

Ahead of the weekend, it is plausible that the local currency would continue clamping on its improvement against the U.S dollar with a boost from interbank players pruning their long dollar positions.

Bank of Uganda has invited the public to tender bids to a 3 year and 10 year bond auction slated for Wednesday next week.

The U.S. dollar stood little changed against its peers yesterday as investor caution prevailed with U.S. tariffs on Chinese goods taking effect. U.S. President Donald Trump confirmed that the tariffs would kick in on today. Trump told reporters that another $16 billion is to be expected to go into effect in two weeks, which he considers to impose on the $500 billion tariff in Chinese goods if Beijing retaliate.
The chances appear slim for China and the U.S. to reach an agreement on trade issues, for which trade war worries will be a long-term uncertainty for at least the next two years.

The Pound edges higher after BoE’s carney keeps hopes of an august rate hike. This supported the GBP/USD to rally above the 1.3250 mark on the day.

The EUR/USD traded at the 1.1690 handle after German factory orders surged by 2.6% in May, beating economists’ expectations of a 1.1% increase. The euro was further boosted by easing trade tensions after German Chancellor Merkel indicated a willingness to discuss potential tariff reductions.