The Uganda shilling on January 2 recovered from previous session’s losses to turn higher against the greenback amid a drop in foreign currency demand.

Shilling maintains stability against dollar

The Uganda shilling barely moved against the greenback on Thursday with little to display on the demand and supply counters.

Scant dollar inflows quenched foreign currency demand from interbank players for the majority of the session, leaving the shilling unaffected at the 3720/3740 levels same as previous close. Ahead of the weekend, outlook remains towards a stronger shilling trading range bound within the 3700/3740 bracket amid high levels of liquidity in the money market arena.

Greenback remains flat against rivals

The U.S. dollar was flat against its rivals on Thursday as the Federal Reserve minutes did little to dent investor expectations for a December rate hike, but added to expectations that interest rates were close to neutral. Beyond monetary policy, mixed U.S. economic data showing ongoing strength in consumer spending, but a slowdown inflation kept a lid on gains in the greenback.

The Pound dipped lower, with GBP/USD holding at $1.2769 amid uncertainty over whether Theresa May’s Brexit withdrawal deal will pass a parliamentary vote due to take place on December 11. The Bank of England went ahead and warned on a no-deal Brexit could plunge the UK economy into the worst recession since the Second World War.

The EUR/USD rose to $1.1384 as Italy’s willingness to amend the budget is being well received by the bond markets. The single currency gained further after the release of the FOMC minutes of November kept interest rate unchanged at 2.00-2.25% as expected.

Source: Commercial Bank Of Africa (Uganda)