The tide turned in the Uganda Shilling’s favour in yesterday’s trading session as a result of improved foreign currency inflows.
A lack of dollar demand for most part of the day coupled with increased corporate activity on the supply counter exerted downward pressure on the USD-UGX currency pair to close 5 shillings lower by session’s close.
Today we expect a drop in market activity that could see the shilling stay range bound within recent levels.
Dollar rides higher than peers
The dollar was higher on Wednesday, supported by comments from senior Federal Reserve officials playing down the likelihood of interest rate cuts, and by a fresh bout of safe-haven buying on geopolitical tensions. The dollar index, which measures the greenback against a basket of six major currencies, was at 97.36, up nearly half a percent from Monday’s lows and up 0.1% from late on Tuesday.
The British pound has lost ground on data showing average earnings growth slowed slightly in March. It’s also still under pressure after Labour Party Deputy Leader John McDonnell warned that cross-party talks on a deal to approve Brexit are close to collapse.
Prime Minister Theresa May indicated on Tuesday that she is aiming for a fourth parliamentary vote on her withdrawal agreement sometime in June. The euro drifted after news that the German economy grew by 0.4% in the first quarter, a figure that has already been overshadowed by weak business surveys in April and May. A second reading of Eurozone GDP is due later Wednesday.
