It was another day of trading dominated by the recent theme of the shilling’s weakness, as the local currency slipped once again against the dollar.
Greenback demand from interbank players continued to put pressure on the local unit in yesterday’s session.
Some foreign currency supply later in the day helped limit the USD/UGX currency pair’s slide to 5 shillings by the closing bell.
With persistent dollar demand going into the weekend, we anticipate the local currency will continue losing ground against the greenback in today’s trading.
Dollar stays stable against peers
The dollar was unchanged against its peers as dismal U.S. retail sales data reinforced expectations the Federal Reserve will not raise rates this year, while the market awaited developments in trade talks between Washington and Beijing.
U.S. retail sales posted their largest decline since September 2009, data showed on Thursday, a sign of weakness in the consumer sector, which accounts for more than two-thirds of the economy.
Elsewhere, sterling was down at $1.2791 after British Prime Minister Theresa May suffered a defeat on her Brexit strategy on Thursday that undermined her pledge to European Union leaders to get her divorce deal approved if they grant her concessions.
The euro was lower at $1.1284 due to weaker-than-expected euro zone data. Analysts expect the European Central Bank to keep monetary policy accommodative for the rest of the year, which will most likely keep a lid on the single currency.
