The Uganda shilling crept higher against the dollar on Monday, a session that saw a late uptick in market activity especially on the foreign currency supply counter.

Shilling draws back to close day weaker than dollar

The shilling drew back to close the day weaker versus its American counterpart in Tuesday’s session. Early trading witnessed subdued activity with no drastic swings.

As the day progressed, dollar demand gripped the market, absorbing the fading supply as importers took advantage of the somewhat fair levels.

In the new day, the USD/UGX pair is likely to remain within the tight but now familiar ranges.

Greenback takes breather after recovery

The dollar took a breather after recovering from a brief spill overnight when markets were whipsawed by mixed messages on policy from the Federal Reserve.

The dollar had taken an initial knock from a surprisingly sharp retreat in the ISM index of manufacturing to 52.8, which overshadowed a strong ADP report on hiring. All that changed when Fed Chair Jerome Powell said the factors dragging on inflation might be “transitory” and he saw no case for a rate move in either direction.

Sterling was one of the few currencies to buck the dollar, touching a two-week high on speculation that Brexit talks between the British government and the main opposition party were making some progress. The pound was last at $1.3054, having been as high as $1.3101 overnight.

The euro was back at $1.1200, after the German inflation rate bettered forecasts to surge higher on Tuesday the odds of a positive surprise from the overall Eurozone figure improved.