The shilling waffled to the weaker side by the closing bell yesterday as demand for the greenback dominated the trading session.
Foreign currency inflows that gave the home unit a boost earlier in the day seemed to have fizzled out leaving the home unit weighed down by reviving dollar appetite from interbank players.
Looking ahead, we expect the local currency to remain trapped within the 3670-3700 band, with the direction of the USDUGX pair remaining mostly flow driven in the near term.
The U.S. dollar edged lower on data showing inflation remained muted, while the conclusion of the U.S.-China phase one trade deal had a muted impact on the greenback.
The Labor Department said its producer price index, which measures prices that businesses receive for their goods and services, slowed to a pace of 0.1%, below economists’ forecasts for a 0.2% rise.
In the 12 months through November, the PPI rose 1.3%, in line with forecasts of 1.2%.
GBP/USD rose to $1.303, even though the case for a Bank of England rate cut strengthened after the latest U.K. economic data showed the pace of inflation slipped to three-year lows.
The pound added 0.22% to $1.115 as softer Eurozone industrial production data did little to ease worries about stuttering growth in the economic bloc.