The shilling weakend against the U.S dollar on Thursday as dollar demand persists


The Uganda shilling resumed its downward trend against the U.S dollar undermined by an uptick in greenback demand from the corporate sector and commercial banks. The USD/UGX pair closed within the 3870/3890 band from 3860/3880 on Wednesday.

On the last trading day of the Financial Year 2017/2018, market chatter alludes to a relatively busy trading session as the regulator keenly watches the market to halt any major
downslide of the home currency.

The highly liquid money market added to the local unit’s vulnerability for the day. The Regulator was actively seen absorbing excess liquidity through a 7 day repo, 28 days and 56 days deposit auctions.

The U.S. dollar traded on the back foot against its rivals on Thursday , held back by weaker U.S. economic data showing that the economy expanded at a slower than expected rate in the first quarter of the year.

Data showed that the U.S. gross domestic product slowed to a 2% annual rate in the January to March
period while initial jobless claims rose by 9,000 well above economist expectations of a 2,000 rise.

The Euro benefited from a slump in the greenback as traders piled into the single currency amid data showing inflation in some German regions was above the ECB’s target rate. The EUR/USD bounced from a session low of $1.1527 to trade higher within the $1.1581 perimeter.

The GBP/USD traded at $1.3089, down 0.19%, as potential Brexit related headline risks from the European Summit have been limited as the EU’s migrant crisis dominated discussions.