The Uganda shilling closed the week lower against the U.S. dollar on account of increased dollar demand.
Markets

U.S. dollar little changed despite Middle East tensions

The Uganda shilling closed the week lower against the U.S. dollar on account of increased dollar demand.

The local unit started the day on the back foot, weighed by increased activity in the foreign currency demand counter, that was unmatched by muted dollar inflows.

The USDUGX currency pair closed the session 10 shillings higher by the closing bell.

We expect the home unit to continue trading within a range in the short term as flows continue to dominate the local FX scene.

The U.S. dollar was little changed on Friday, after recording gains earlier in the day on heightened Middle East tensions.

The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 96.532.

Looking ahead, this week will bring the first U.S. nonfarm payrolls report of the decade, which is expected to point to a slowdown in jobs growth after November’s bumper gains.

The GBP/USD pair fell to $1.3107 amid concern that the U.K. won’t be able to reach a free-trade agreement with the European Union by the deadline at the end of this year.

On the data front, the final reading of December’s U.K. services activity due later in the day is expected to show a slight uptick though stay in contraction territory below 50.

Meanwhile, the EUR/USD pair slipped to $1.1165 as data showed the region’s manufacturing downturn deepened in December.