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U.S dollar took a breather Tuesday after rising seven week highs

KAMPALA, Uganda–The Uganda shilling held steady against the U.S dollar on Tuesday buoyed by parallel activity on both greenback counters as inflows from charity organisations and commodity exporters sufficiently matched subdued demand from importers.

The USD/UGX pair traded at the 3690/3710 levels throughout the day. A similar narrative is expected today as activity on the greenback demand counters fades.

Today, the primary bond market hovers with activity as the Central Bank auctions treasury bills with Ugx 175 Billion on offer.

The U.S dollar took a breather on Tuesday after rising to seven week highs against a basket of the other major currencies, as a boost from rising Treasury yields faded despite upbeat data showing that U.S home sales rose 4% to a seasonally adjusted annual rate of 694,000 units last month.

The greenback had strengthened across the board on Monday as the yield on 10-Year U.S Treasury notes hit its highest in more than four years at 2.998% boosted by strengthening inflation prospects.

The Euro was little changed, with the EUR/USD last at 1.2214 despite investor concerns the European Central Bank could opt for a more cautious outlook on monetary policy tightening at a meeting this week.

The Pound backed away from five-week lows, with the GBP/USD edging up 0.14% to 1.3961, but gains were held in check as doubts over a prospective rate hike by the Bank of England next month weighed.