The Uganda shilling’s movement against the U.S. dollar was constrained within the 3660-3680 band in Monday’s trading session.
The session saw minimal activity across the counters that just evened out on the day. The shilling is likely to continue trading within the recent ranges as market continues to witness a stillness in activity.
Skewed liquidity in the money market was witnessed with the overnight and 1wk interbank lending rates running between 8.0-10.0 per cent and 10.0-11.0 per cent respectively.
Greenback falls as hopes for US-China trade deal increases investor appetite
The greenback fell on Monday as hopes for a trade deal between the U.S. and China increased investor appetite for riskier assets such as equities and emerging market currencies and debt.
The news increased hopes that the two will sign a trade deal soon, although official Chinese news agency Xinhua and others cautioned that there were still differences between the two parties. The British pound recovered slightly, but is still in a holding pattern as the political process governing Brexit continues to twist. U.K. Prime Minister Theresa May has pushed back the next “meaningful vote” on her withdrawal agreement (the original one failed by over 200 votes in the House of Commons) as lawmakers on both sides continue to push agendas that seem incapable of commanding a majority in parliament.
The single currency picked up a bid near 1.1330 yesterday, but the ensuing gains were capped near $1.137, a level which has acted as strong resistance since Feb. 20. EUR/USD may rise well above 1.14 if Powell talks dovish during his testimony despite the recent optimism on trade.