The Uganda shilling maintained its upward trend against the U.S. dollar on Friday, partly supported by a local currency tightening operation by the Central Bank.
The USD/UGX pair owed solidity to low dollar demand from interbank players and inflows from remittances. The pair was quoted at the 3685/3705 levels at days close. Ahead of the week, we expect the local unit to clamp on to further gains as activity on the local FX market increases
There is a Treasury bill auction this week with UGX 195 Billion on offer. We expect to see an extension of the recent trend with a rate rise across all three tenors.
Dollar registers little change as investors remain cautious
The U.S. dollar was little changed on Monday in Asia as investors remained cautious ahead of the highly anticipated U.S. Federal Reserve meeting later this week. The Fed is widely expected to deliver a quarter-point interest rate hike at its meeting on Wednesday, while a post-policy meeting press conference by Fed Chair Jerome Powell would also be closely watched.
Concerns about the outlook for global growth along with trade tensions and market volatility have prompted traders to push back expectations on the expected pace of Fed rate hikes in 2019. The GBP/USD pair was flat at $1.2581.
Reports from last week said British Prime Minister Theresa May’s failure to win key concessions from the European Union to salvage her Brexit deal has added to concerns over the prospect of a ‘no-deal’ exit from the EU. The EUR/USD closed the week at $1.1305, pressured by softer-than-expected economic data where reports had it that economic conditions worsened in the Euro Zone.