A dearth in market activity left the USDUGX currency pair stuck within what is now a familiar furrow in Friday`s and early Monday Morning trading sessions.
Market participants were slow off blocks, leaving the pair within the 3680/3710 on account of subdued albeit matching flows on both the supply and demand counters.
We expect activity to pick up in the month, with the Shilling’s new trading levels likely to manifest.
The U.S. dollar was slightly lower on Friday as investors waited for news from the G20 summit, while inflation data supported the Federal Reserve’s patient approach to interest rates.
Core inflation data rose in May, supporting the central bank in taking a cautious approach to cutting rates, despite expectations among investors and pressure from President Donald Trump.
The British pound gained to $1.2710 recovering from the five-month lows it reached earlier in the day against the dollar.
The pound is still at the mercy of uncertainty over Brexit, with Boris Johnson – the frontrunner in the race to become the next Conservative Party leader – still sending mixed signals about the likelihood of a “Hard Brexit” on Oct. 31.
The euro was up at $1.1388, although worries about a no deal Brexit capped the currency’s gains. Data from Germany and Spain gave a mixed picture, although the European Commission’s monthly roundup of business and consumer sentiment was overwhelmingly gloomy.