A persistent lack of dollar demand continued to boost the performance of the shilling against the dollar on Tuesday.
With supply for foreign currency outweighing dollar buyers, the home unit stood tall against the greenback throughout the session.
The USD/UGX pair drifted towards the lower regions of the 3685-3705 range. As the dearth in foreign currency demand ensues, we see the local unit strengthening further against the dollar barring any fresh factors.
The U.S. dollar steadied after a drubbing the previous day, clawing back losses against safe-haven currencies as China took steps to limit weakness in the Yuan and reassured investors that it wouldn’t weaponize its currency in its trade spat with the U.S.
The euro was down against the dollar on broader dollar strength. Risk appetite also picked up slightly after Yuan stabilized leading to euro sell off from above 1.1200 levels.
GBP/USD also weakened, retreating from a session high of $1.221 to trade at $1.214, amid rising fears the U.K. could leave the European Union without a trade deal, referred to as a “hard Brexit.”