A persistent lack of dollar demand continued to boost the performance of the shilling against the dollar on Tuesday.
Markets

Shilling stays unmoved on minimal activity across counters

The local FX market begun the new week as it had closed the previous one, with minimal activity witnessed across the counters, leaving the Uganda shilling unmoved for most of the session.

Subdued demand for the dollar from corporate and interbank players was amply met by fickle foreign currency inflows that left the home unit little changed from previous close.

With a continued slowdown in activity, we see the local unit trading within the 3720-3760 range against the dollar in the interim.

 

Greenback slips

The U.S dollar declined, weighed by weak economic data and gains on commodity linked currencies that were buoyed by an extended surge in crude oil prices.

Factory goods orders fell 0.5%, in line with markets expectations amid weak orders for machinery, transportation equipment, computers and electronic products.

The GBP/USD pair posted some modest intraday gains and settled at around 1.3060 levels, despite broad dollar weakness undermined by Brexit-related headlines.

U.K. Prime Minister Theresa May continued talks with opposition leader Jeremy Corbyn to break the Brexit impasse and is set to meet with German Chancellor Angela Merkel and French President Emmanuel Macron today, in a bid to secure an extension to Brexit with the April 12 deadline looming.

The EUR/USD pair traded at the 1.1275 levels, supported by better-than-expected trade data from Germany. Focus shifts to the European Central Bank meeting tomorrow, with many expecting further dovish commentary from ECB President.