KAMPALA, Uganda–The Uganda shilling closed unchanged at the 3690/3710 levels against the U.S. dollar on Wednesday.
The local currency came under pressure late in the day after greenback demand from the manufacturing sector keyed into the market. Market sentiment indicates that this demand will drift into today’s session, triggering a slight upward movement in the USD/UGX pair amidst scanty dollar inflows.
Yields at yesterday’s Treasury bill auction took up a mixed trend across the board. The yield on the 91 days bill dropped to 8.716% from 8.761 % while the yield on the 182 days and 364 days tenors rose to 9.306% and 9.773% from 9.228% and 9.685% respectively
The U.S dollar rose to a more than three-month high against a basket of major currencies as U.S. bond yields resumed their trend higher.
The 10 year U.S. treasury edged higher after topping 3% for the first time in four years yesterday amid investor expectations for a continued uptick in inflation, economic growth and Federal Reserve interest rate increases.
Also supporting the rally in the greenback was a slump in the Euro as traders appeared to cut their bets that the European Central Bank will adopt a more hawkish outlook on monetary policy tightening at its meeting slated for today. The EUR/USD fell by 0.42% to $1.2181 on Wednesday.
The Cable fell by 0.23% to $1.3945 amid reduced investor optimism for a May Bank of England rate hike in the wake of weaker data and less hawkish comments from BoE governor Mark Carney.