The Uganda shilling was constrained within the 3695-3715 band in yesterday’s session, with minimal and balanced activity on both the demand and supply counters.

Uganda Shilling shreds off week’s gains against US Dollar

KAMPALA – The local unit shred off its week’s gains against the U.S. dollar after foreign currency demand outweighed supply on the last day of trading.

A surge in greenback demand from corporates and interbank players, attracted by the favourable levels sent the home currency 5 shillings lower by session’s close.

This week, participants expect the local unit to remain range bound within the 3650/3700 levels as the Central Bank keenly watches the market.


Greenback rises against most peers

The dollar rose against most other currencies, holding near a six-week high as fresh worries about U.S.-Sino trade tensions and global growth drove appetite for safehaven assets.

Trade tensions between the world’s two largest economies have been a major driver of global investor sentiment over the past year.

Market confidence took a hit last week when U.S. President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal.

Trump also vowed to increase U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by March 2. The euro was marginally lower versus the greenback at $1.1322 as core European government debt yields touched their lowest in over two years.

Elsewhere, sterling was down at $1.2935. Traders expect the pound to remain volatile amid heightened political uncertainty over the Brexit process.