Breenback supply activity outweighing dollar demand gives gain to shilling: The Uganda shilling was a touch stronger against the U.S. dollar at last week’s close as greenback supply activity outweighed demand. The USD/UGX pair found comfort at the 3695/3715 levels from 3700/3720 levels previously.
Emergent foreign currency demand from the corporate sectors and importers is likely to keep the local unit on the back foot in the near future. However, the end month greenback inflows form charity organizations are seen barring a slight downslide of the Shilling.
The money market continues to swing amidst fair liquidity as fixed Income traders prepare for primary auctions in August.
The U.S. dollar traded water against its peers, as market participants await key central bank meetings this week, which could set the near-term course for currencies. Central banks in focus include the Bank of Japan, the Federal Reserve, and The Bank of England which is to make a policy decision on Thursday.
On the other hand, the two-year Treasury yield rose, underscoring strong rate hike expectations in the
market. This limits the dollar’s losses, although movements are likely to be limited ahead of the BOJ
The GBP/USD traded flat at 1.3200 level over Brexit concerns holding in the middle with negotiations between the UK and the EU slated to resume in mid-August.
The Euro nudged to $1.1659, extending Friday’s modest gains. Trump-Junker trade talks were successful in defusing immediate trade tensions but progress on trade talks is essential in coming months.