The Uganda shilling traded stronger against the U.S dollar on Tuesday with the USD/UGX pair plunging to the 3660/3680 levels.
The home unit was boosted to a day’s win as interbank players trimmed long dollar positions amidst low appetite for hard currency from the corporate sector and tight liquidity in the money market arena.
A range-bound trading session at the 3600-3700 levels is expected for the pair today with a firmer shilling still on the cards in the near term. Fixed Income traders centre attention to the primary securities market as Bank of Uganda hopes to raise Ugx 270Billion.
Drop in consumer confidence dips greenback
The U.S. dollar was flat against a basket of major currencies on Tuesday after consumer confidence dropped to an 18-month low following the government shutdown. The Conference Board’s consumer confidence gauge fell to 120.2 in January from 126.6 last month, missing economists forecast for a reading of 124.7.
Trader’s attention now shifts to the the Federal Reserve’s interest rate decision due later today. The central bank is expected to leave its key federal funds rate target unchanged at 2.25% to 2.5%.
Meanwhile, the GBPUSD pair fell as British lawmakers rejected most amendments that took the ‘’no-deal’’ Brexit off the table. Instead they voted to instruct Prime Minister Theresa May to demand from the EU to replace the Irish border arrangement as a part of Brexit, but Brussels said it will not change.
The Euro was flat versus the dollar maintaining a tight range throughout the session amid a cautious mood across financial markets and uncertainty over the U.K. parliamentary vote.