Slowdown in appetite for dollars gives gain to Uganda Shilling

The Uganda shilling posted gains against the U.S. dollar, buoyed by a local currency liquidity squeeze in the interbank market and a slowdown in appetite for dollars by the corporate sectors.

Commercial banks quoted the shilling at 3680/3700, stronger than Monday’s close of 3693/3713 ranges. The outlook for the local unit remains largely range-bound as interbank players expect market activity to steadily pick up in the local FX scene.

Bank of Uganda offers Ugx 220 Bio in today’s 2 year and 15 year primary bond auctions.

On the international scene, the U.S. dollar edged lower against a basket of currencies on Tuesday as its recent rally on global trade tensions showed signs of fading. U.S. economic data showing U.S. job openings undershot economists’ estimates did little to help the greenback’s attempt at paring losses.

In a reminder of the growing trade disputes, the U.S. Trade Representative’s office said that the United States would begin collecting 25 percent tariffs on another $16 billion of goods it imports from China later this month.

The GBP/USD rose to $1.2951, but remained at 11- month lows as fears of a no-deal Brexit offset upbeat

U.K. house price data.

Inflation expectations and hopes for interest rate hikes from the Bank of England are also dragging on the Sterling. The Euro weighed stronger on the dollar at $1.1592, despite a steeper-than-expected decline in German industrial production.