The Uganda shilling traded stronger against the U.S dollar on Wednesday with the USD/UGX pair plunging to the 3710/3730 levels from 3725/3745 range on Tuesday.
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 skewed liquidity in the money market arena.
A range-bound trading session at the 3700/3740 levels is expected for the pair today with a firmer shilling still on the cards in the near term.
Dollar slips against peers
The U.S. dollar was lower on Wednesday, as inflation data underlined expectations that the Federal Reserve will slow its pace of rate hikes in 2019. The Labour Department reported its consumer price index was unchanged from a month earlier, slowing from the 0.3% increase seen in October. Analysts had forecast a 0.1% increase.
The buck has been under pressure recently amid expectations that the Fed will pause its pace of interest rate hikes next year, despite an expected rate increase next week. The Pound held onto most of the previous session’s gains after British Prime Minister Theresa May survived a no-confidence vote, buying time to try to steer her unpopular Brexit deal through a deeply divided parliament.
The Euro trod water ahead of a closely-watched policy meeting by the European Central Bank later in the day, after edging higher on news that Italy lowered its deficit target for next year and expected the European Commission to accept its new 2019 budget proposal.
Source: Commercial Bank of Africa Uganda