The Uganda shilling lingered within the 3660/3680 bracket on Wednesday amidst minimal activity on the demand and supply counters.
We expect the local unit to trade at current levels today, as market players await in stance for fresh factors to give direction to the shilling.
The money market was highly liquid with the overnight interbank lending rate running between 6.50-10.50 percent
Dollar hits two-week highs against rivals
The U.S dollar hit two-week highs against its rivals on Wednesday after data showed the U.S. trade deficit narrowed by more-than-expected, while weakness in the euro also lifted sentiment.
The trade deficit narrowed to $49.3 billion in November, down $55.70 billion the prior month. That was better than economists’ expectations of $54.0 billion.
Meanwhile, the pound edged lower to $1.2940 against the dollar as the European Union showed little sign of flexibility in renegotiating the UK withdrawal agreement, which sets out the terms on which Britain will depart from the European Union on March 29. Investors focus now shifts to Bank of England’s monetary policy expected later today.
The Euro fell to $1.1367 as weaker-than-expected German factory orders data underscored the weakness in the country’s broader economy, which analysts said continues to drift toward a recession.