The Uganda shilling appreciated further against the U.S. dollar in yesterday’s session lifted by a sell-off wave as commercial banks sought to trim their hard currency positions.
Markets

Fading greenback demand elevates Uganda Shilling at weekend close

The Uganda shilling appreciated further against the U.S. dollar in yesterday’s session lifted by a sell-off wave as commercial banks sought to trim their hard currency positions.

The fading greenback demand elevated the local unit to close higher at the 3750/3770 levels, stronger than Wednesday’s close of 3765/3785. Prior to the weekend, we expect a range bound trade with a bullish tinge towards the shilling.

In the money market, BOU absorbed Ugx 476bn of excess liquidity through the 7-day repo and deposit auction.

The overnight interbank lending rates ranged between 10.0 and 12.0 per cent.

The dollar rose against its rivals Thursday as a slew of positive U.S. economic data reaffirmed investor expectations that the Federal Reserve will continue with its glacial pace of rate hikes, despite criticism from President Donald Trump.

Trader expectations for the December rate hike jumped to more than 90%, from about 80% on Wednesday prior to the release of the minutes.

The Pound came under selling pressure against the greenback after little progress was made on the Brexit talks, prompting UK Prime Minister Theresa May to warn “more difficult moments” lie ahead.

The Euro fell to $1.1456 amid reports of heightening tensions between the European Commission and Italian officials.

The single currency hit its lowest intra-day level of $1.1447 after the European Commission said Italy’s

2019 budget draft is in serious breach of European Union budget rules.