The local unit continued to make headway against the U.S. dollar in Monday’s session.
Markets

Dollar calm; retains strength against main rivals

The local unit continued to make headway against the U.S. dollar in Monday’s session.

Sustained foreign currency supply hauled the USDUGX pair lower by 5 shillings on the day. The Shilling’s sentiment has improved in recent days, while the pair’s downward pressure has been exacerbated by the absence of purchases by major corporates in the market.

The outlook remains favourable for the domestic unit, as market players wait for any new factors to give shilling direction.

The U.S. dollar was largely flat in European trading Monday, with the U.S. holiday providing little incentive for traders to take risks. That said, the greenback still looks strong against its main competitors.

Figures released by the Commerce Department on Friday showed U.S. housing starts in December were well above economists’ estimates for 1.38 million and were the biggest gain in 13 years.

The positive data reduced chances that the Federal Reserve would slash rates when it meets later this month.

The pound traded around the $1.2979 levels, down 0.2% as odds of a Bank of England (BoE) rate cut continued to rise after two of the bank’s policymakers said they would back a rate cut vote to stimulate the UK’s flagging economy.

The euro held steady around $1.1095 after Germany’s PPI report for December confirmed consensus and edged higher from 0% to 0.1%, whilst the yearly figure dipped at -0.2%.