The Uganda shilling gained ground against the U.S dollar yesterday amidst fading hard currency demand from the corporate sector and late buck sell off from interbank players seeking to cut their long dollar position.
The currency pair was in a holding pattern in the morning session, trading within the 3735-3755 farrow, before the foreign currency influx from exporters saw home unit notch 10 shillings higher against the dollar at the closing bell. In the money market, we observed a superfluous of liquidity with interbank lending rates quoted as low as 6.0 per cent for the overnight while the 1 week counter registered no activity.
Geopolitical tensions dip dollar
The dollar inched down on Monday amid geopolitical tensions as investors pause ahead of a planned meeting between U.S.-China leaders later this week. Trade worries weighed on the greenback, as investors wait for the G20 summit in Argentina.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down to 96.785, retreating from one-week highs of 96.96 reached overnight The Pound Sterling was also higher, at $1.2839 after the EU leaders approved the terms of the UK’s withdrawal from the bloc, the Brexit deal will have to pass a vote in the British parliament in early December.
The euro pared back earlier gains rising to $1.1350, boosted by news that disagreements between Rome and Europe could be resolved. Italian Deputy Prime Minister Matteo Salvini indicated that his government could lower its borrowing targets, which the European Commission had said is against EU fiscal rules.