The Uganda shilling continued its bullish trajectory against the dollar on the first day of the week, boosted by ample dollar supply.
The FX market was positive for the local unit, with the USDUGX trending lower early in the session. Despite some demand from the corporate desk seeking to nip the buck at the enticing levels, dollar sellers came back with more flows, supporting the tide in favour of the home unit.
With dollar supply showing no sign of easing, we see the shillings’ party continuing in today’s trade session.
The dollar was mixed against developed-market peers on Monday after hitting a new four-month high in overnight trading.
The dollar index, which tracks the dollar against half a dozen developed-market currencies, was at
99.007, thanks largely to gains against the Japanese yen in the wake of data showing that the Japanese economy shrunk at an annual pace of 6.3% in the fourth quarter.
The euro fell to $1.0827, ahead of a highly watched German survey today, which is expected to show a sharp slump in investor confidence and fuel growing pessimism about the outlook for Europe’s largest economy.
Sentiment for the euro has worsened dramatically this month after weak manufacturing and gross domestic product data from Germany, Europe’s largest economy, suggested that the eurozone is more vulnerable to external shocks than previously thought.
Sterling also nursed losses against the dollar and the euro due to worries about economic ties between Britain and the European Union as both sides laid out conflicting views on how to proceed with trade negotiations.