KAMPALA, Uganda–The Uganda Shilling continued its losing streak against the U.S dollar undermined by sustained greenback demand stemming from a cocktail of sectors and commercial banks on Friday.
The USD/UGX pair rested at an all-time high of 3705/3725 from the 3700/3720 levels registered previously. This week, market charter alludes to a rising USD/UGX pair as trifling dollar inflows ebb participants’ confidence in the local currency amidst an uptick in foreign currency demand.
The money market was fairly liquid last week and a similar narrative is expected this week. The Central Bank will stay out the primary bond market, so securities trading will be confined to the secondary counters.
The U.S dollar slightly rose against a basket of major currencies on Friday after U.S. economic growth slowed in the first quarter of the year. First quarter U.S.
GDP data released on Friday showed that the U.S. economy expanded at only a 2.3% annual rate as consumer spending slumped.
However, analysts remained optimistic that economic growth will rebound in the second quarter of the year, arguing that the first-quarter growth weakness is somewhat of a common occurrence and most likely understated with an average error of 9%.
The GBP/USD fell 0.98% to $1.3781 after UK first quarter economic growth fell short of economists’ estimates, further denting investor hopes that the Bank of England will raise interest rates next month.
The EUR/USD fell 0.16% to 1.2101. This comes a day after the ECB president Mario Draghi admitted that the pace of the Eurozone recovery had moderated broadly across all countries but reaffirmed his confidence that inflation would eventually hit the bank’s target.