The Uganda shilling remained frail on Tuesday, a day that saw sustained market activity on the foreign currency demand counter.
After holding out for most of the day against the greenback, the local unit buckled on the back of dollar demand from commercial banks and merchandise imports in mid trading to close the day quoted within the 3813/3833 band.
Traders expect the home unit to remain under pressure in today’s session as demand for the greenback holds.
Relatively skewed liquidity in the money market continues to hold with overnight interbank lending rates striking the 11 per cent mark.
The U.S. dollar turned positive against its rivals on Tuesday, as investors weighed the latest escalation in
the tit-for-tat tariff dispute between the U.S. and China.
China in a report said it would impose new tariffs on U.S. goods worth $60 billion, effective Sept. 24 in response to U.S. tariffs on Monday of 10% on $200 billion in Chinese goods.
In which President Donald Trump responded in a tweet that “there will be great and fast economic
retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
The GBP/USD pair fell to $1.3136 amid Brexit fears in yesterday’s session. Investors’ attention will be shifted on the UK’s data reading later today, with the hope of the CPI for the year into August to tick down slightly from 2.5% to 2.4%.
The Euro fell to $1.1662 as investors grew nervous about Italy’s chances of passing a budget within the
European Union guidelines after Deputy Prime Minister Luigi Di Maio clashed with Finance Minister Giovanni Tria over budget proposals.