The Uganda shilling started the week lower against the U.S. dollar on account of increased greenback demand.
The local unit started the day on the back foot, weighed by increased activity in the foreign currency demand counter, that was unmatched by muted dollar inflows.
The USDUGX currency pair closed the session 5 shillings higher by the closing bell.
We expect the home unit to continue trading within a range in the short term as flows continue to dominate the local FX scene.
The US Dollar weakened after the number of those infected by COVID-19 in the US was expected to double within the next 48 hours. US President Donald Trump was also preparing to address the virus’ impact on the American economy.
With odds now rising to around an 84% chance that the Federal Reserve could cut its interest rates as early as 17-18 March, the US Dollar suffered against many of its peers in yesterday’s trade session.
The Euro was held at $1.139 benefitting from the release of Germany’s industrial production report for January, which beat forecasts and rose from -2.2% to 3% and signalled signs of the Eurozone’s largest economy’s recovery pre-coronavirus.
GBP/USD rose to $1.3135 amid expectations that the Federal Reserve will slash rates to 2015 lows while growing optimism that new fiscal stimulus to boost economic growth measures will be including in the upcoming UK budget also underpinned sterling.
