The Uganda shilling edged higher against its foreign counterpart as pending mid-month tax payments by firms reduced demand for the dollar.
The local currency gained 5 shillings closing at the 3660/3680 levels against the greenback during yesterday’s fairly active session.
It is plausible that the USD/UGX pair could prolong current trend in the absence of fresh demand as interbank players trim long dollar positions.
Dollar holds close to its 2019 high
The dollar held close to its 2019 high as U.S.-Sino trade tensions and global growth worries underpinned the greenback’s safe-haven appeal.
Investors are focusing on high level trade talks in China where Washington is expected to keep pressing Beijing on long-standing demands that it make sweeping structural reforms to protect American companies’ intellectual property, to end policies aimed at forcing the transfer of technology to Chinese companies, and curb industrial subsidies. The single currency was off slightly at $1.1272, having lost nearly half a percent on Monday.
The European Central Bank is expected to maintain a highly accommodative monetary policy this year as growth slows in the Eurozone and inflation stays low.
Elsewhere, sterling was marginally higher at $1.2857, after tumbling 0.75 percent in the previous session. Analysts expect the British pound to remain volatile due to the uncertainty surrounding Brexit.