The shilling’s trundle downwards continued for the third consecutive day in yesterday’s session on the back of weakening sentiments and augmented demand for the greenback.

Shilling closes week unchanged

The Uganda Shilling closed unchanged at the 3715/3735 levels against the U.S dollar in a day of seesaw trading on Friday.

A head of the week, we expect the local unit to trade under pressure with the USD/UGX pair range-bound within the 3720/3750 bracket as interbank players anticipate soaring greenback demand from the corporate sector amidst scanty foreign currency inflows.

Relatively skewed liquidity in the money market continues to hold with overnight interbank lending rates striking the 10.5 per cent mark.

US dollar struggles against peers

The U.S. dollar struggled for direction on Friday as Federal Reserve Chairman Jerome Powell said he would change the balance sheet if market concerns outweigh the strong economic data. With upbeat jobs data that was released earlier in the session increased the chance for the Fed to raise rates this year.

The pound sterling was higher as the services sector accelerated in December. Still, the economy is losing momentum ahead of the UK’s departure from the EU. GBP/USD increased to $1.2686.

The EUR/USD was unchanged at $1.1401 due to the higher dollar and disappointing Eurozone data. Eurozone consumer prices rose at a slower than expected pace in December, increasing expectations that the ECB will keep interest rates unchanged.