The Uganda shilling was ranging, oscillating up and down in a non- directional market.
The unit opened the week stable, surrendered ground mid- week and at close of the trading, the shilling marginally strengthened supported by interbank selling.
The trading was kept within the levels of 3755-3765. In the Interbank money market, overnight and one week funds held at previous week levels of 6% and 9% respectively.
In the fixed income market, there was no primary auction for government securities, some secondary trades were reported.
In the regional currency markets, the Kenya shilling edged down and was seen ceding more territory, pushed by a surge in demand from energy and manufacturing sectors. Trading was in the range of 101.30/50.
While in South Africa, the rand was on the edge after it became obvious that key cabinet slots were retained by familiar faces.
The Rand traded at 14.705 to the dollar.
In the global markets, the greenback was on track to hit a straight 4 month high after trade tensions prompted investors to seek shelter in safe haven with the demand for the dollar showing no signs of abating.
While in the US money markets, investors were pricing in roughly two rate cuts by January 2020 with the bond yield curve inverted signaling recessionary risks.
In commodity markets, oil prices plunged, trading at the lowest since November 2018 as trade conflicts continued with President Trump slamming tariffs on all Mexican goods.
Brent crude futures traded at 64.28 per barrel. In the gold market, prices rose on increased safe haven demand trading at 1.290.68 per ounce.
Forecast for the shilling indicate that the unit will likely trade with a downside bias, undermined by both domestic and external factors.
On the external side the dollar strength on safe haven demand will have a negative effect on emerging market currencies while the expected local demand build up ahead of the fiscal budget will continue to hurt the currency.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates VISIT Plot 12 KAMPALA ROAD-CHAM TOWERS SUITE 43: call: 0414-580619, 0392-612648