The shilling traded relatively flat versus the greenback in what was a dull Tuesday trading session.
Market activity was surprisingly dreary, with both demand and supply counters sizing each other out. Foreign currency flows were evenly matched for the majority of the session and kept the USDUGX currency pair steady.
Looking ahead, flows are likely to drive the direction of the domestic unit, although its fortunes may be fleeting as dollar buyers may come to the fore and nip the greenback at these lucrative levels.
Deleterious sentiment brought about by uncertainty as to whether the United States would delay the planned tariffs on nearly $ 160 billion worth of Chinese imports and the sudden rise in both the euro and the pound forced the greenback to contract ahead of the Federal Open Market Committee’s announcement later today.
The Euro got the much-needed reprieve on Tuesday after data released showed German exports for the month of October rose by 1.2% defying an expectation that it would contract by 0.7%.
This, coupled with positive findings from the ZEW research institute’s monthly index on economic morale among investors, which precipitously rose to 10.7 from -2.1 in October, underpinned the common currency’s ascent of 0.23% against the U.S Dollar.
The sterling, also a victor in yesterday’s trading, shot up to an 8 ½-month high against the buck after investors priced in Boris Johnson’s party would win a majority in parliament in the December 12th election paying no heed to a flat GDP reading for the month of October.