The shilling ended the week on a strong footing versus its American counterpart, buoyed by incessant foreign currency inflows.
The local currency gained in Friday’s session with dollar appetite from corporates more than sufficiently met by inflows from various sectors of the economy.
The USDUGX pair remains comfortable in the current ranges, and we expect the same band to continue holding this week, in the absence of new market moving information.
Greenback nears two-year high
The U.S. dollar neared a two-year high on Friday as the White House delayed auto tariffs, while trade tensions with China increased demand for safe-haven assets amid an equity selloff.
Meanwhile, China’s state-run media took a surprisingly hostile stance on possible continued trade talks, saying it was meaningless” for officials to meet without the U.S. showing it is sincere. The tensions between the two largest economies in the world took a sour turn after the White House excluded Huawei and other Chinese companies from the U.S. market.
Sterling slumped for the sixth day in a row, with GBP/USD down to $1.2744 as talks between the Labour and Conservative party stopped and the chances of a Brexit deal slimmed again.
The euro briefly pared losses after the White House said President Donald Trump is delaying a decision for as long as six months on whether to impose tariffs on imported cars and parts to allow for more time for trade talks with the EU and Japan.