The Uganda shilling rallied against the U.S dollar on Friday closing stronger at 3700/3720 levels amid receding greenback demand from interbank players.
Activity in the local market was slow to pick up as major corporates remained on the sidelines. However, some selling took place that elevated the home unit by session’s close. We expect a ramble in today’s trade with a bearish bias towards the local currency.
Bank of Uganda will be holding a T-bond auction for the 2 year and 15 year paper re-openings slated for Wednesday this week.
Dollar gains ground amid investor optimism
The dollar gained on Friday amid growing investor optimism over a U.S-China trade deal, after Chinese officials reportedly offered to boost U.S. imports. The buck was further lifted by U.S. industrial production data, where manufacturing output rose by 0.3% last month, beating economists’ forecasts for a 0.2% rise.
The GBP/USD pair traded lower at $1.2880 in the wake of the U.K. parliament’s rejection of the government’s Brexit deal, on the back of weak retail sales data for December. Another round of parliamentary discussions will be held today, speculation that the ECB will have to delay its first rate hike.
The euro fell to $1.1350 at weeks close. The single currency could be set for a further slide as analysts sound the alarm on Euro-area weakness that could prompt the European central bank to turn more dovish in March