The Uganda shilling on January 2 recovered from previous session’s losses to turn higher against the greenback amid a drop in foreign currency demand.
The local FX market was quiet in the morning with no movement in the currency, late emergence of dollar sellers saw the local unit rise within the 3700/3720 bracket. We presume a similar narrative today with a bias towards a stronger shilling.
There is a T-bill auction today with an offer of Ugx 190bn for the 91 day, 184 day and the 364 day papers as we expect rates to alter at current levels.
Dollar falls against Yen
The dollar fell against the yen and euro in thin year-end trading on Monday as optimism about progress in the U.S.-China trade dispute hurt its safe-haven allure, but the greenback stayed on track to log its strongest annual performance in three years.
The two nations have engaged in a trade war for much of 2018, shaking world financial markets as punitive tariffs disrupted the flow of hundreds of billions of dollars’ worth of goods between the world’s two largest economies.
The GBP/USD pair weakened to $1.2728 due to Brexit woes. With three months until the United Kingdom is due to leave the European Union, British Prime Minister Theresa May’s Brexit deal is floundering and traders expect the sterling to remain under pressure.
The euro slipped to $1.1446. Traders expect the single currency to remain under pressure as both growth and inflation in the Eurozone remain below the European Central Bank’s expectations.