The Uganda shilling posted limited gains against its foreign counter part in yesterday’s session winched up by a sell-off wave as commercial banks sought to trim their hard currency positions.
In what was a relatively busy trading session, the USD/UGX pair shed 5 shillings to trade lower at the 3720/3740 levels after activity on the dollar supply counters overshadowed demand as corporates lingered on the sidelines.
Amid deficiency of any fresh developments to provide directional impetus for the local unit, we perceive the USD/UGX pair could hold within current ranges during the day.
Dollar under pressure on growing expectations
The dollar was under pressure on growing expectations that the Federal Reserve will pause its rate tightening cycle this year, while optimism about the Sino-U.S. trade talks reduced demand for safe-haven assets.
The Pound Sterling was higher but still under pressure over Brexit. The future of Britain remains uncertain as the government is unlikely to get another deal if the draft bill fails, increasing the chances of a hard Brexit come March 29.
Economic data in the Eurozone has remained consistently weaker than estimates over the last few months, especially in France and Germany, the Eurozone’s economic powerhouses. The ECB is widely expected to remain accommodative in 2019, which should keep a lid on the single currency. The euro gained marginally against the dollar fetching $1.1547 overnight.