The Uganda shilling fluttered between gains and losses on Friday, ending the day unchanged after failing to commit to either direction.
Price action for the USD/UGX pair was largely flow driven, with dollar appetite witnessed earlier in the day pushing up the pair.
This changed in late session after a slight dollar sell off aided the local currency’s lift, ending the day at the 3660/3680 levels.
Looking forward, we see caution running high in the local FX market ahead of the possible break of the 3700 level hurdle.
Dollar marginally weaker than peers
The dollar was marginally weaker, as increasing expectations of a U.S.-Sino trade deal led investors to shift away from the safety of the greenback into riskier assets.
Both the United States and China reported progress in five days of negotiations in Beijing last week, although the White House said much work remains to be done to force changes in Chinese trade behaviour.
The single currency was flat at $1.1292 in early trade and has had two straight weeks of losses.
Traders are betting on a weaker euro in the coming months as they expect the European Central Bank to keep its monetary policy accommodative due to low growth in the common area, tepid inflation and political uncertainties. Elsewhere, sterling was up to $1.2903, building on its gains from ealier.
The pound rallied 0.6 percent, helped by reports of some hedge fund buying, a conciliatory tone on Brexit from the Irish foreign minister and stronger-thanexpected British retail sales data.