The Uganda shilling appreciated on the first trading day of the week buoyed by steady dollar inflows from charity organisations and merchant exporters.
The local unit rose by 10 units against the greenback during the session, with the USD/UGX currency pair closing the day at the 3685/3705 levels.
Market chatter alludes to a range bound session at current levels, with a bullish tinge towards the shilling as FX activity expands.
Dollar hover near two-week high on slowdown in China’s economy
The dollar hovered near 2-week highs against its peers as a slowdown in China’s economy to 28-year lows fanned fresh worries over global growth and prompted investors to move into safe-haven currencies.
On the whole, the buck is also facing indirect pressure from slackening momentum in the global economy which has forced the U.S. Federal Reserve to take a cautious approach on any further interest rate increases. Speculation is rife the Fed might soon pause its tightening cycle. Sterling continued to wobble.
With little time left until the United Kingdom is due to leave the European Union on March 29, there is no agreement in London on how and even whether it should leave the world’s biggest trading bloc, and a growing chance of a dramatic ‘no-deal’ exit with no provisions to soften the economic shock.
The euro was flat at $1.1367. The single currency is likely to remain under pressure as growth in Europe’s economic powerhouses, Germany and France, is languishing and inflation remains weak. The European Central Bank is widely expected to maintain an accommodative mode for this year.