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

Shilling trades within confines of dollar during calm trading

The shilling traded within confined ranges against U.S. dollar on a rather calm Tuesday trading session.

The session saw the home unit little changed versus the greenback on the back of minimal but matching flows on both the demand and supply counters.

We expect the local unit to trade within the 3740-3790 levels, as the local currency market continues to be characterized by low activity.

Investor focus now shifts to the 2yr and 5yr auction later today with an offer of Ugx 210bn, as traders expect rates to edge lower.

Dollar rises against peers

The dollar rose against its peers as trade issues remained foremost on investors’ minds after U.S. President Donald Trump on Tuesday insisted that trade talks with China had not collapsed.

The market focuses next on euro zone and German gross domestic product (GDP) reports and U.S. retail sales and industrial product for April due later on today for pointers on the state of the global economy.

The pound sterling dipped after disappointing economic data where the U.K. wage inflation cooled more than expected in March.

The euro was down to $1.1206 after Italy’s deputy prime minister said the country was ready to break European Union budget rules on debt levels if necessary to boost employment.