Markets

Agricultural exporters and remittances strengthen Uganda Currency on Tuesday trading

The Uganda shilling strengthened against the U.S dollar on Tuesday bolstered by some hard currency inflows from agricultural exporters and remittances by Ugandans working abroad.

In what was a relatively active day on the FX counters, the USD/UGX pair found comfort at the 3690/3710 levels from Monday’s close of 3715/3735. Today, a similar narrative is likely to ensue alongside sustained muted activity on the greenback demand counters.

With no primary auction this week, Government securities trading is confined to the secondary market space.

On the international scene, the U.S. dollar paused its rally against its rivals on Tuesday as mixed U.S. economic data and a rise in the pound weighed on sentiment. Preliminary U.S. manufacturing PMI for July topped expectations, while the services PMI fell marginally short of forecasts.

The July survey data indicated that the US economy sustained strong growth momentum after what looks to have been a solid second quarter, representing a good start to the second half of 2018.

The Sterling dipped to a low of 1.3070 on Tuesday, but managed to stage a rebound to bring the week into positive territory, trading at 1.3150 giving today’s bulls a target to aim for.

The Euro drifted a bit lower to start out the day on Tuesday, but then skyrocketed towards the 1.1725 handle before rolling over again. Fears of a trade war with the United States kept the Euro trapped in narrow ranges as Juncker travels to Washington today for trade focused talks with Trump.