The home unit remained well supported against the dollar on Wednesday, holding on to gains garnered in the previous day.
Trivial dollar demand from importers was sufficiently met by ample foreign currency inflows from various sectors of the economy, leaving the local currency unchanged at the 3660- 3690 bracket from the previous close.
Devoid of any major market-moving events, we expect the shilling to continue trading within these elevated levels.
The U.S. dollar remained near three-year highs on Wednesday, underpinned by better-than-expected
economic data. The greenback had a muted reaction to the minutes of the Federal Reserve January meeting, which suggesting interest rates will likely be on hold for a time.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose to 99.52, touching its highest level since May 2017.
The euro traded at $1.0810, close to its lowest since April 2017. The common currency managed to stabilize, but the sentiment remains weak after disappointing economic data sent it crashing through closely-watched support levels.
Sterling fell to $1.294 on Wednesday as market sentiment is caught between optimism about the economy and pessimism about Britain’s talks with the European Union for a free trade deal.