The Uganda shilling recouped some of its losses against the greenback yesterday backed by end month flows from merchant exporters.
Commercial banks quoted the local unit at the 3660/3680 bracket stronger than previous close. Ahead of the weekend, we expect a range bound session within the 3660/3700 band amid high levels of liquidity in the money market space.
The annual inflation rate in Uganda increased to 2.7 percent from 2.2 percent in the prior month attributed mainly by price increases in housing & utilities, miscellaneous goods & services, and clothing & footwear. The core inflation rose to 3.0 percent from 2.80 percent in the prior month.
Dollar shrugs off falling government bond yields
The U.S. dollar shrugged off falling government bond yields, recouping losses against its rivals from a day earlier when the Federal Reserve signalled a willingness to hold off rate hikes. Trade tensions also weighed, as investors waited for news of developments in trade talks between the U.S. and China.
U.S. President Donald Trump is expected to meet with Chinese Vice Premier Liu He in the Oval office later in the day but no deal is expected before Trump meets with Chinese President Xi Jinping. The pound struggled for direction as traders awaited more news on the Brexit front.
U.K. Prime Minister Theresa May is expected to make her way to Brussels and presents proposals, to the European Union in a bid to resolve the Irish border arrangements after Brexit.
Elsewhere, the euro dipped with EUR/USD flat at $1.1476 as news that Italy is in a recession spooked investors. Indicative Cross Rates Buy Sell EUR 1.1236 1.1636