Receding demand for USD by merchant importers gives gain to shilling: The Uganda shilling was a tad stronger on Thursday supported by a sell-off of dollars by commercial banks amisdt receding demand for the same from the merchant importers.
Traders quoted the local unit at the 3745/3765 levels, close to 5 shillings stronger than Wednesdays close. Ahead of the weekend, a strong shilling remains on the cards as the effect of yesterday’s conversion could be prolonged.
The money market was awash with liquidity on Thursday prompting Bank of Uganda to absorb upto Ugx727 billion through a 7 day repo and term deposit auctions.
The U.S dollar was flat against its rivals on Thursday, pressured by a bout of mixed U.S. economic data and improving risk sentiment after the U.S. confirmed trade talks with China would resume.
Ahead of the weekend, the main focus will shift to U.S.-China trade issues from Turkey with the Chinese delegation visiting Washington and as $16 billion in new tariffs on Chinese good are due to take effect along with an equal amount of retaliatory tariffs from Beijing.
The British Pound posted slight gains in the Thursday session trading at $1.12708 on the release front, British retail sales rebounded with a gain of 0.7%, beating the estimate of 0.2%. The scheduled meeting between U.S and China on trade talks revived hopes of an end to the global trade war that could boost the Pound against the dollar.
The Euro was a shade lower at $1.1372 after gaining 0.3 percent overnight. The single currency was down 0.3 percent this week, during which it brushed a 13-month low of $1.1301 in the wake of concerns that financial turmoil in Turkey could negatively affect European banks.