An uptick in foreign currency demand saw the Uganda Shilling close Friday’s trading session weaker against the U.S. dollar.
Markets

Uganda shilling depreciates further against the US dollar

An uptick in foreign currency demand saw the Uganda Shilling close Friday’s trading session weaker against the U.S. dollar.

The session saw the domestic unit hold steady versus the greenback for the better part of early trading. Corporate sector dollar buyers later swarmed the market and pushed the local unit 10shillings lower by the closing bell.

Looking ahead, the USDUGX currency pair may rise further if increased dollar demand is anything to go by.

The U.S. dollar traded sideways against a basket of other major currencies on Friday on account of mixed U.S. economic data.

U.S. Consumer Spending rose by 0.1% in August, below expectations of 0.3%, while U.S. Durable Goods Orders increased slightly to 0.2%, far below the 2% reading for July. The dollar index hovered around the 99.00 handles as a result.

The EURUSD plunged to a 2-year low before rebounding amid a weak Eurozone economic outlook. Negative interest rates, quantitative easing and other economic stimuli by the European Central Bank (ECB) have made the greenback more attractive against the euro.

Cable likewise dropped to a 3-week low after Bank of England (BOE) policymaker Michael Saunders intimated that the watchdog may cut interest rates even if a disorderly Brexit is avoided, citing the disappointing U.K. and global economic growth.