The home unit shone on Monday, gaining traction versus the dollar in what was an active start to the week.
Foreign currency inflows from various sectors of the economy more than sufficiently met the trifling dollar appetite from importers, leaving the local currency well supported, and fast gaining charge.
Investor focus shifts to the T-bill auction scheduled for Wednesday with an offer of Ugx 220bn for the 91, 182 and 364 day papers, as traders expect the rates to hold at current levels.
The U.S. dollar rose on Monday, as manufacturing activity in New York posted its biggest increase in more than two years. The New York Federal Reserve said that its Empire State manufacturing index for July came in at 4.3 points, compared to -8.6 in June. A reading above zero suggests an expansion in regional business activity.
The euro was slightly lower ahead of a European Central Bank meeting next week, where traders expect the bank to keep rates steady. A rate cut of 10 basis points in September and another cut in March next year is expected.
The GBP/USD pair extended its steady intraday decline and dropped to session lows around the 1.2525 region, pushed down by a pickup in demand for the greenback. Focus now shifts to today’s release of UK jobs report and the closely watched US monthly retail sales, as well as Governor Carney’s speech at G7 for fresh clues.