The Uganda shilling posted gains against the U.S. dollar on Tuesday bolstered by end-month inflows from charity organizations alongside low-key corporate demand for the greenback.
The USD/UGX pair rested at 3690/3710 lower than 3695/3715 Monday’s close.
The Uganda Bureau of Statistics reported that Headline inflation for July rose to 3.1% from 2.2% in June 2018.
The rise was attributed to increase in prices of transport, housing and utilities, cost of communication and furnishing and household equipment in July from June 2018.
Today in the FX market, outlook is confined to a relatively stable USD/UGX pair with a mild bullish bias on the home unit backed by liquidity squeeze in the money market arena.
The U.S. dollar edged higher on Tuesday, shrugging off mixed economic data as inflation remained close to Federal Reserve’s target as the two-day Fed meeting kicked off.
The Federal Reserve is expected to keep interest rates unchanged at 1.75-2.00% today, having lifted borrowing costs by 25 basis points in June.
Meanwhile reporters have sited that the Trump administration is considering to raise its planned 10% tariffs on $200 billion in Chinese goods to 25%.
The jury is out on whether this is yet another ‘clever’ negotiating tactic by the U.S. after jittery reactions from the market as expected. Risk appetite looks set once again to pull back over the next couple of trading sessions.
The GBP/USD fell to $1.3129 as traders weighed expectations for a Bank of England rate hike on Thursday and ongoing Brexit uncertainty.
The EUR/USD pair rallied during trading on Tuesday, reaching a significant amount of resistance just above the 1.1750 level.