The Uganda Shilling depreciates against U.S dollar on Friday


KAMPALA, Uganda–The Uganda Shilling continued its losing streak against the U.S dollar on Friday amidst an upsurge in demand for the hard currency from the manufacturing sector and interbank players.

The USD/UGX pair closed the week at the 3707/3730 mark from opening levels of 3703/3723. Relatively calm activity in the forex market is likely to materialise at the beginning of this week as firms settle local mid-month tax obligations.

Bank of Uganda will hold a 3 year and 15 year primary bond auction this Wednesday with a total Ugx 220billion on offer.

The U.S dollar slid lower against a currency basket on Friday after it hit its highest levels of the year earlier in the week, boosted by expectations for higher interest rates. The Fed raised rates in March and projected two more rate hikes this year, although many investors see three hikes as possible.

The rally in the U.S dollar lost momentum after docile U.S. inflation data on Thursday tempered expectations for a more aggressive pace of monetary tightening by the Fed.

The Euro was higher for a second day, with the EUR/USD climbing 0.22% to 1.1941 after the ECB
President, Mario Draghi said the euro zone needs a new fiscal instrument to help weaker member nations if they are being overly penalized by investors during a debt crisis.

The Pound pushed higher, with the GBP/USD rising 0.17% to 1.3542, to eke out a slender weekly gain of
0.08% after three weeks of declines after the Bank of England left interest rates unchanged.