The Uganda Shilling was marginally stronger on Friday against the greenback, with minimal and balanced activity on both the demand and supply counters.
The currency movement was constrained within the 3725/3745 bracket as dollar inflows from a cocktail of sectors surfaced late in the session. We expect a familiar narrative today as forex activity expands.
With no primary bound auction this week, a surge in the secondary market activity is anticipated amidst fairly balanced liquidity in the money market.
Dollar records mixed performance
The U.S dollar was mixed in Friday’s trading session on the back of disappointing US jobs report. The non-farm payrolls (NFP) showed a 155,000 jobs increase in November, well below the 200,000 forecast while wages rose by 0.2 percent.
Key for investors is the effect it will have on future rate hikes as Fed member comments and softer data continue to make a case for less rate hikes in 2019. Inflationary forces remain cowed and this week’s CPI and retail sales data could further bolster a narrative of a pause in rate hikes. Cable fell on Friday, trading at 1.2600 lines and was headed for a fourth successive week of losses as British Prime Minister Theresa May presses ahead with plans for a parliamentary vote on her Brexit deal with the E.U.
The EUR/USD gained in the previous session trading at 1.1400 levels after a lower than expected U.S. NFP report in November, causing the greenback to fall against the Euro. Focus shifts on The European Central Bank (ECB) final monetary policy meeting of 2018 on Thursday when it is expected to announce a possible timeline of the first interest rate lift.