The Uganda shilling recouped some of its losses against the greenback yesterday backed by end month flows from merchant exporters.

Local currency gains momentum supported by sell-off wave

The Uganda shilling gained momentum in yesterday’s session buoyed by a sell-off wave from interbank players amidst skewed liquidity in the money market.

Activity on the supply counters outweighed demand locking the USD/UGX pair at the 3700/3720 bracket, majority of the day.

Ahead of the weekend, it is plausible that the local currency would continue clamping on its improvement against the U.S dollar with a boost from interbank players pruning their long dollar positions.

Greenback falls against peers

The dollar fell versus its major peers, as investors grew increasingly confident that the U.S. Federal Reserve may hit the pause button on monetary tightening this year.

Sentiment was still slightly cautious on a lack of concrete details from the United States and China on any progress in their trade dispute after a three-day meeting in Beijing. The two sides are more than halfway through a 90-day truce agreed by U.S. President Donald Trump and his Chinese counterpart Xi Jinping.

The euro gained to $1.1519, after losing 0.4 percent of its value in the previous session. The single currency has been pressured by a slew of weaker-than-expected economic data, especially from France and Germany. Elsewhere, sterling traded marginally firmer, fetching $1.2752 with traders focused on the progress of Brexit.