The Uganda shilling appreciated on Friday helped by dollar inflows from charities and downcast demand from commercial banks and corporates as the latter settled tax obligations.
The local unit locked the day sturdier against the buck at 3665/3685 from 3715/3725 at week’s start. Market conversation alludes to a stronger shilling with the USD/UGX currency pair holding within the 3660/3720 range.
With no primary bond auction this week, a surge in secondary market activity is anticipated amidst fairly balanced liquidity in the money market.
Dollar falls on improved risk sentiment
The U.S. dollar fell to more than one-week lows on improved risk sentiment on Friday after President Trump announced a tentative agreement with lawmakers to end a partial U.S. government shutdown for three weeks of stop-gap funding.
Trump had previously insisted on the inclusion of $5.7 billion to help pay for a wall along the vast U.S.-Mexico border in any legislation to fund government agencies.
The Pound Sterling hit a more than three-month high against the U.S. currency after a report that Northern Ireland’s Democratic Unionist Party had privately decided to offer conditional backing for British Prime Minister Theresa May’s Brexit deal next week.
The Euro rebounded, steadying after a dovish European Central Bank president failed to alter an already downbeat assessment on the euro zone’s economy.
ECB President Mario Draghi warned on Thursday a dip in the euro zone’s economy could be more pronounced than thought a few weeks ago, comments seen as signaling a delay in the bank’s first interest rate hike.