The tide turned in the Uganda Shilling’s favour during Wednesday’s trading session as a result of increased foreign currency inflows.
Markets

Local unit trades sideways amid minimal activity on trade counters

The Uganda shilling traded sideways against the U.S dollar on Tuesday amid minimal and balanced activity on both the demand and supply counters.

USDUGX currency pair was quoted within the 3695/3715 band at close of day. We expect the home unit to trade at current levels with a bias tinge towards a stronger shilling.

Focus shifts to the T-bill auction with an offer of Ugx 220bn for the 91,182 and 364 day papers as traders anticipate a hike in the rates.

Greenback rises against peers

The greenback rose on Tuesday as bond yields bounced back, easing worry over the health of the U.S. economy in spite of weak housing data. The yield on the benchmark United States 10-Year note was at 2.435%. Worry about an inverted bond yield subdued as analysts remarked that inversions must last a long time for it to truly forecast a recession.

The Cable increased yesterday on speculations that the UK PM Theresa May will be able to garner support for her third Brexit proposal whereas soft data from the US further pleased the pair buyers. While Brexit could keep entertaining traders, the US trade balance and the UK CBI realized sales will add momentum into the sentiment.

The euro lost to $1.1255, extending overnight losses. The currency has been on shaky ground after Friday’s weaker-than-expected German manufacturing survey raised concerns about Europe’s largest economy.