The tide turned in the Uganda Shilling’s favour during Wednesday’s trading session as a result of increased 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 USDUGX currency pair to close 5 shillings lower by session’s close.
We expect a drop in market activity that could see the shilling stay range bound within recent levels.
The U.S. dollar rose after the Federal Reserve cut its key interest rate by 25 basis points as expected, but hinted that more cuts are not guaranteed.
In his news conference after the rate cut announcement, Powell struggled to explain the need for a cut when the domestic economy is performing well, but stressed that rising trade tensions have caused many businesses to hold off on investment decisions.
The GBP/USD pair was down to 1.2125. The pound continued its downward momentum as investors rushed to factor in the possibility of Britain leaving the European Union without a deal. Britain’s new Prime Minister Boris Johnson has vowed to pull the country out of the EU by Oct. 31, whether transitional trading agreements are in place or not.