The Uganda Shilling closed abit weaker at the 3720/3740 levels against the U.S dollar in a day of seesaw trading on Tuesday.
Today, the local unit continues to trade under pressure with the USD/UGX currency pair range-bound at the 3720/3760 levels as interbank players anticipate soaring greenback demand from the corporate sector amidst scantly foreign currency inflows.
Relatively skewed liquidity in the money market continues to hold with overnight interbank lending rates striking the 11 per cent mark.
US Dollar rises against rivals
The dollar rose from lows against its rivals on Tuesday after the plunge in U.S. Treasury yields stalled. Safehaven buying emerged after President Donald Trump’s tweets raised fears that the trade war was not over.
Trump said in a tweet he was “Tariff Man,” reminding investors that he was not afraid to re-escalate trade tensions with China, scaling back optimism from a day earlier, prompting support for Treasuries and helping the greenback move off lows. The Pound reversed its gains from earlier after Prime Minister Theresa May’s government was found in contempt of parliament for refusing to release its full legal advice on Brexit.
GBP/USD fell to $1.2722, from a session high of $1.2839, which had followed hopes that Brexit could be cancelled after a top European Officer said that UK should be able to unilaterally cancel its withdrawal from the EU. The EUR/USD fell to $1.138 from a session high of $1.1423 intraday despite the treasury yield inversion and the risk off in equities.