The Uganda shilling clamped onto its gains in yesterday’s session as commercial banks continued to convert their dollar holdings to coup with the local currency liquidity squeeze.
Markets

Shilling stays stable amid matched demand, supply counters

The Uganda shilling remained unchanged on Friday amid matched activity on both the demand and supply counters.

The shilling movement was constrained within the 3700/3720 levels as interbank players posed some threat on the local unit late in the session.

Ahead of the week, we expect the home currency to trade bullish at current levels as corporates settle mid-month taxes.

Dollar struggles to make gains against rivals

The greenback struggled to add to gains against its rivals on Friday. US inflation figures tracked by the CPI during the last month of 2018 came in line with previous forecasts. Headline CPI dropped at a monthly 0.1% and rose 1.9% from a year earlier.

The GBP/USD pair surged on the back of expectations that the UK will seek to delay its scheduled exit date from the European Union, trading at 1.2850 levels. Data out of the UK on Friday showed the UK economy expanded in November 2018 by 0.20% above expectations. Focus shifts to tomorrows scheduled vote by the UK Parliament on the Prime Minister Theresa May’s Brexit deal that is widely expected to be rejected.

The EUR/USD was slightly higher at the end of the week, trading at 1.1470 levels as the dollar faded. The minutes of the ECB’s December meeting suggested that the ECB are likely to be very data dependent over the coming year or so. Indicative Cross Rates Buy Sell