Steady dollar inflows into the local market amid a decline in foreign currency demand elevated the shilling in yesterday’s trade.
The local unit rose by 5 shillings against the greenback during the session, with the USDUGX currency pair closing the day within the 3690/3710 bracket.
We expect the home currency to clamp onto further gains as FX activities increase amid skewed liquidity levels in the market.
Dollar rises against peers amid renewed US-China tensions
The dollar rose against most of its peers as reports of renewed tension in U.S.-China trade negotiations supported safe-haven bids, although the Federal Reserve’s policy meeting later due in the day limited the greenback’s gains.
Against a basket of key rival currencies, the dollar was almost 0.1 percent higher at 96.454 as it managed to find its footing after hitting its lowest level since March 1 at 96.291 in overnight trading. Sterling was a shade lower at $1.3259.
It pared gains overnight on concerns that British Prime Minister Theresa May’s request for delaying Brexit was running into complications with the European Union.
EUR/USD inched up to 1.1360 gaining support from better than expected German Zew surveys which pushed up bond yields. Direction today will be largely guided by the outcome of the fed meeting.