Shilling Makes little gains against dollar on low export inflows

The Uganda shilling posted limited gains against the U.S dollar on Thursday fortified by little inflows from commodity exporters. The local FX market was quiet in the morning with no movement in the currency, late emergence of dollar sellers saw the home unit rise within the 3740/3760 bracket. Prior to the weekend, we expect the shilling to clamp onto its gains as traders employ a wait and see stance on the local FX scene.

Global scene

The U.S. dollar extended gains against its rivals on Thursday after the Federal Reserve gave an upbeat assessment of the economy and signalled a December rate hike remained on track. Meanwhile, the U.S. Department of Labour reported Thursday that initial jobless claims dropped by 12,000 to a seasonally adjusted 215,000 for the week ended November 3, in line with economists’ estimates.

The GBP/USD fell to $1.3053 as market participants grew anxious about the prospect of a Brexit deal after a UK government official reportedly downplayed reports that an agreement was imminent. The Euro dropped to $1.1342 as traders reacted to negative news out of Europe. The standoff between the EU and Rome over Italy’s budget deficit and concerns over Europe’s slowing economic growth have dragged the single currency which has fallen 4.2 percent versus the dollar over the last six months.