A persistent lack of dollar demand continued to boost the performance of the shilling against the dollar on Tuesday.
Markets

Shilling movement against dollar remains restrained

The Uganda Shilling’s movement against the U.S. dollar remained constrained within the 3680-3710 band on Tuesday.

The session saw minimal activity across the counters that just about evened out on the day, with USDUGX pair closing the day unchanged from previous day’s close.

The domestic unit is likely to continue trading within recent ranges as market continues to witness a lull in activity.

Dollar bumps off three-week peak

The dollar was under pressure, elbowed off a three-week peak after a bounce in U.S. yields stalled ahead of a global central bankers meeting, at which the Federal Reserve is expected to give clues on further rate cuts. Sterling remained volatile as the tussle between the European Union and the U.K. over the Irish backstop in the Brexit deal.

The pound jumped against the dollar when German Chancellor Angela Merkel said the EU will think about practical solutions regarding the backstop, but the enthusiasm was short-lived and sterling retreated.

Meanwhile, Brexit Secretary Stephen Barclay said that U.K. officials will stop attending some EU meetings starting Sept. 1 as the country prepares to officially withdraw from the bloc on Oct. 31. The euro recovered from earlier lows after Italy’s Prime Minister Giuseppe Conte said he is resigning ahead of noconfidence vote, putting the future of the Italian government in jeopardy.

Uncertainty still remains, as it is unclear if snap elections will be called or if parliament will be asked to try and form a new government.