The USD/UGX pair maintained a tight range
Markets

Shilling marginally stronger due to subdued appetite for hard currency

The Uganda Shilling was marginally stronger in yesterday’s session lifted by subdued appetite for hard currency from corporate firms as they beat the tax settlement deadline.

A relatively stable USD/UGX pair is plausible today, trading range-bound within the 3670/3700 band as lacklustre activity continues to typify the forex market amid high levels of liquidity.

Yields at the T-bond auction followed a downward trend across all tenors. The 2yr and 15yr papers dropped to 14.750 and 17.00 per cent from 15.252 and 17.750 per cent respectively.

Dollar cramped against rivals

The dollar was cramped versus its rivals, restrained by concerns over global growth, the U.S. government shutdown and a yet-unresolved U.S.-Sino trade dispute. Markets are bearish on the outlook for the buck this year.

Traders in interest rate futures are wagering that the Federal Reserve will stand pat on rates in 2019 in the face of growth risks both at home and globally. Elsewhere, sterling traded marginally higher at $1.3075, hovering near highs last seen in mid-November a sign traders expect Britain to avoid a chaotic exit from the European Union.

The single currency was marginally higher at $1.1383 as traders expect the ECB to remain dovish and keep monetary policy accommodative for an extended period of time. Low inflation as well as weaker-than-expected economic activity in Germany and France, however, may lead ECB President Mario Draghi to point toward a potentially longer lasting slowdown.