The Uganda shilling began the day on a downward path against the U.S dollar on the back of increased dollar demand.
Early morning dollar demand from interbank players’ outweighed activity on the supply counters to push the local unit higher, and close the day quoted within the 3675/3695 bracket.
We see the home unit trading defensively today as sustained dollar demand continues to manifest itself in the local currency market.
Cautious investors hold Dollar above three-week low
The dollar held above a three-week low as investors remained cautious amid uncertainty over the progress in U.S.-China trade talks and upbeat remarks on the economy from Fed Chairman Jerome Powell.
The greenback had also found support on a flare-up in tensions between Pakistan and India, sending investors out of riskier markets and into safer assets.
Sterling held onto gains after rallying to its highest levels in seven months on Wednesday as traders ramped up bets that a no-deal Brexit was less likely and that Britain’s departure from the European Union would be delayed. The euro was slightly higher at $1.1379.
The pair failed to take out the key Fib hurdle, possibly due to lack of fresh developments on US-China trade. Investor focus shifts to inflation differential with the German data due today expected to show the cost of living jumped 0.5 percent month-on-month in February, having dropped 0.8 percent in the previous month.