The Shilling’s movement was restricted within tight ranges as calm continued to engulf the local FX market on Tuesday.
A state of equilibrium permeated as dollar inflows matched corporate demand for foreign currency, leaving the USDUGX pair tucked within the current range of 3660-3690.
The local unit continues to be supported by foreign currency inflows as well as higher market yields seen in recent days.
The dollar extended gains on Tuesday, underpinned by stronger-than-expected U.S. economic data and strong gains against the yen on fading safe-haven demand as coronavirus fears eased.
Factory goods orders rose 1.8% in December, topping economists’ forecasts for a 1.2% rise, marking the largest gain since August 2018.
The pound rose to $1.3041, clawing back some of its losses from a day earlier, on economic data showing better-than-expected construction activity in January.
The rise in the pound comes despite ongoing worries that the U.K. and EU may be headed for a clash on trade.
The euro was steady against the dollar at $1.1042 boosted by it’s stronger than expected Eurozone manufacturing PMIs.