The Uganda shilling seesawed between gains and losses in Fridays session, ending the day unchanged versus its American counterpart.
Early trading saw the shilling advance marginally against the dollar on the back of augmented inflows. As the session progressed foreign currency buyers retreated from the sidelines to take advantage of the low levels to the detriment of the local unit.
Ahead of the week, our view for the shilling remains on the bullish camp, as corporates settle mid-month obligations.
Dollar takes a leap
The U.S. dollar jumped on Friday after the economy added more jobs than expected in June, dampening expectations that the Federal Reserve will cut rates aggressively to stave off a slowdown. Non-farm payrolls (NFP) rose by 224,000 in June, well above consensus expectations for 160,000 and a sharp rebound from a downwardly-revised 72,000 in May.
The EURUSD pair touched two-week lows of 1.1205 on Friday after the NFP report which came better than expected. This week, monetary policy is likely to continue driving the pair with the publication of the Fed and ECB minutes.
The GBPUSD pair dropped heavily on Friday after the US NFP dimmed prospects of increased monetary easing from the Fed. In addition, poor economic data and a rise in expectations that the Bank of England will cut rates added further weakness to the Sterling. While nothing major is up for release on the economic calendar, news headlines concerning UK politics are likely to be the key driver for Cable.