The Uganda shilling strengthened against the U.S. dollar as activity on the FX supply counter outmuscled demand in yesterday’s trading session.
Corporate dollar sellers made forays into the local foreign exchange market, outpacing waning demand, and pushed the home unit higher by 15 shillings at the closing bell.
We see the USDUGX currency pair trading within recently established ranges, albeit with a bullish bias in the near term, as market participants look out for fresh factors to offer price direction.
The U.S. dollar climbed Wednesday as risk appetite bounced back after President Donald Trump signaled deescalation in conflict with Iran despite the Islamic Republic launching several attacks on U.S. forces in Iraq.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose to 96.75.
The dollar was also lifted by ongoing weakness in the euro following softer factory order data from Germany, the Eurozone’s largest economy. EUR/USD fell to $1.111.
The pound, meanwhile, continued to lose ground against the greenback as U.K. Prime Minister Boris Johnson kept fears alive that Britain could leave the European Union without a deal at the end of year.