interbank and corporate sector demand for foreign currency weakens shilling
Markets

interbank and corporate sector demand for foreign currency weakens shilling

Interbank and corporate sector demand for foreign currency weakens shilling: The Uganda shilling traded lower against the U.S. dollar on Thursday amid an uptick in foreign currency demand from interbank players and the corporate sector.

Commercial banks quoted the USD/UGX pair at 3700/3720 higher than Wednesday’s close of 3685/3705. Prior to the weekend, a weaker shilling is still on the cards as greenback demand persists amidst trifling activities on the supply side.

Next week on Wednesday, the Central Bank will hold a Treasury bill auction offering Ugx 10Bn, Ugx 25Bn and Ugx 135Bn under the 91 days, 182 days and 364 days respectively.

The U.S. dollar rose against its peers on Thursday, having regained traction after U.S. President Donald Trump expressed displeasure over the currency’s strength amid speculation on Bank of Japan scaling back its massive monetary stimulus.

The U.S currency is higher across the board due to higher U.S. yields that hovered near a six week high overnight as traders braced for a potentially strong reading of U.S. gross domestic product data, set for release later on today.

The Pound Sterling traded lower at $1.3104 as a stronger U.S. dollar and mounting uncertainty over Brexit negotiations offset the positive impact of bets on Bank of England interest rate hike.

The Euro edged optimistically higher as Mr. Draghi noted on the gains were pared shortly after as the ECB’s head noted that the markets were tightly aligned making the Eurozone bond yields uncertainty around the inflation receding. However, those tumble, signaling decreasing hawkish ECB monetary policy bets.

BY CBA