The Uganda shilling rallied against the U.S dollar yesterday amidst minimal and balanced activity on both the demand and supply counters. Activity in the local market was slow to pick up as major corporates remained on the sidelines. However, some selling took place that elevated the home unit by session’s close. We expect a ramble in today’s trade with a bullish bias towards the local currency. The money market was visibly liquid with the overnight interbank lending rate ranging between 6.5 per cent – 10.5 per cent.
The U.S. dollar eased on Tuesday, but still remained near a 16-month high in anticipation of Federal Reserve rate hikes. The greenback continued to push higher amid expectations that the Federal Reserve will raise rates in December and beyond, as the U.S. economy gains strength. Meanwhile trade tensions alleviated, amid news that China’s trade negotiator could head to Washington ahead of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping at the G20 summit in Argentina later this month.
The GBP/USD rose to $1.2950 after the European Union and Britain agreed a draft text of a Brexit withdrawal agreement, though doubts lingered about whether the U.K. parliament would back the deal. The Euro edged higher to $1.1272, but was held back by concerns about Italy’s budget proposals and downbeat German investor sentiment data. In contrast to the latest news on Brexit, Italy’s budget proposals remain a drag on the euro.
Source: Commercial Bank of Africa Uganda