The local currency shone on Thursday, gaining traction versus the dollar, amid trivial activity.
Markets

Dollar in narrow range as focus shifts to Trump’s China response

The local currency shone on Thursday, gaining traction versus the dollar, amid trivial activity.

Despite demand for dollars from the corporate and interbank players, the shilling was propelled to close at the 3775-3785 levels as the market was crammed with end month foreign currency inflows.

Ahead of the weekend, the home unit may hold on to its recently acquired gains and possibly set new ranges.

The dollar was hemmed into a narrow trading range yesterday as traders’ focus shifted to U.S. President Donald Trump’s response to China’s passage of a national security law for Hong Kong.

The greenback was on course for a weekly loss against major currencies as progress in lifting coronavirus lockdowns and stimulus plans in Europe weakened demand for safe havens, but the mood could quickly worsen if Sino-U.S. tensions increase.

The common currency headed for its second weekly gain against the greenback as the EU’s announcement of a 750-billion-euro coronavirus recovery fund fuelled optimism about the euro-zone economy. The euro stood at $1.1073 against the dollar.

Elsewhere, the pound held steady at $1.2317 on course for its second weekly gain, supported by broad selling in the dollar this week.

However, sentiment for the pound has been somewhat negative due to calls for the resignation of an influential aide to British Prime Minister Boris Johnson, lack of progress in EU trade talks, and speculation about negative interest rates.