A persistent lack of dollar demand continued to boost the performance of the shilling against the dollar on Tuesday.

Shilling builds on recent strength, touches high against dollar

The shilling built on its recent strength in what was a volatile session on Friday, touching recent highs versus the dollar.

Heightened activity was recorded on both demand and supply counters in the local FX market, with the USD/UGX pair struggling to find a definite direction in early trading.

Later in the day, demand for foreign currency from importers was cowed by the week’s accumulation of flows mainly from investors culminating to a strong finish for the local currency.

Focus remains on the forces of demand and supply as market players wait to see if the next key USD/UGX psychological level will be broken ahead of the week.

Dollar ends week lower than major currencies

The U.S. dollar ended the week lower against other major currencies as a tariff hike of 25% from 10% of $200 billion worth of Chinese imports into the U.S. took effect.

President Donald Trump also ordered the preparation of new tariffs on a further $325 billion worth of goods that would mean nearly all of the U.S.’s imports from China will be subject to a 25% tariff.

The U.S. dollar index dropped to 97.20 intraday. GBP/USD traded sideways around the 1.2960 handle as cross-party talks aimed at finding a common ground on Brexit continue to drag on without result.

The euro rose against the dollar, with the EURUSD hitting a high of 1.1250, on account of lower U.S. inflation data, where April U.S. Consumer Price Index (CPI) excluding Food & Energy came in at around 0.1% lower than the estimates.