The Uganda shilling was marginally stronger against the dollar closing at the 3715/3735 levels amid minimal activity from both corporate firms and commercial banks.
We see a firm trade for the local unit today in the range of 3710/3750 as forex activity expands amidst balanced liquidity in the money market arena.
Bank of Uganda is offering Shs195 billion in tomorrow’s T-bill auction, broken down into Shs15 billion, Shs35 billion and Shs145 billion for the 91day, 182day and 364day papers respectively.
US dollar cringes against major peers
The greenback began the week cringing against its major peers owing to the increased risk appetite amid investors, after Washington and Beijing agreed to an armistice to their bitter trade war. China’s president Xi Jinping and his U.S counterpart met in Argentina over the weekend during a G20 summit where they agreed on a three-month tariff respite to allow for talks on bilateral trade. This staged a comeback for riskier assets with emerging market currencies not being left behind.
Dollar investors have now shifted focus to the Fed’s rhetoric of curbing rate hikes. The British pound collapsed to its lowest level since October on the back of heightened anxiety as to whether the Westminster Parliament would approve Theresa May’s Brexit draft instigating a burly sell off of the cable by investors.
The EUR/USD pair advanced largely benefitting from the prevailing risk temperament and market chatter that the Italian Government was ready to make further concessions on its budget in order to appease the EU.
Source: Commercial Bank of Africa (Uganda)