KAMPALA, Uganda–The Uganda Shilling reversed previous day’s gains against the U.S dollar with the USD/UGX duo seen trading at the 3705/3725 mark as greenback demand from interbank players and importers keyed into the market on Friday.
This week on the USD/UGX counters, a range-bound trading session at the 3700/3740 levels is plausible as an uptick in foreign currency demand from a cocktail of sectors is expected to ensue.
This week in the money market, The Central Bank hopes to raise Ugx 175 billion through a Treasury bill auction slated for Wednesday.
The U.S. dollar hit the highest levels of the year on Friday buoyed up by expectations for further interest
rate hikes by the Federal Reserve this year before trimming back gains slightly after disappointing U.S.
employment data for April.
Data released on Friday showed that the U.S. economy added fewer than expected jobs in April while wages barely rose. This downbeat data however did little to alter investors’ views that the Fed will continue raising rates while other central banks, including the European Central Bank and the BoE will act more slowly.
The Euro fell to four month lows on Friday, with the EUR/USD touching the 1.1911 levels. Sentiment on the single currency was hit by data earlier in the week showing that growth in the euro zone slowed in the first three months of this year.
The Cable ended the week below the 1.3530 mark as Investors expect rates to remain on hold at the Bank of England meeting on Thursday, after a recent spate of weak economic data.