The Uganda Shilling lost ground further against the greenback yesterday on account of increased dollar demand.
The subdued market activity left the USDUGX pair unchanged in early morning trading. This was however followed by an uptick in demand for the buck coupled with paltry flows from the supply counter that saw the local unit shed a further 20shillings by day’s close.
The home unit’s movement is likely to remain flow-driven today, as foreign currency demand and supply battle for supremacy in the local FX market.
The U.S. dollar inched higher yesterday on mixed data that was mostly positive, October Manufacturing Purchasing Managers Index printed at 51.5 against a 50.7 expectation, jobless claims dropped, while nondefense capital goods orders contracted more than expected.
Focus shifts to Michigan consumer sentiment Index due today.
The EUR/USD pair lost about 0.5% yesterday, falling as Preliminary German and Eurozone Markit Manufacturing Purchasing Managers Index (PMI) data disappointed, pointing to a further contraction in the sector.
As expected, the ECB left monetary policy unchanged. The GBP/USD pair slipped below 1.2900 levels
yesterday, as the British Prime Minister Boris Johnson acknowledged for the first time that he will not meet his “do or die” pledge to take Britain out of the European Union before October 31 and called for a general election on December 12 to break the Brexit gridlock.
Meanwhile, markets await E.U’s decision on granting a three-month extension.