By Stephen Kaboyo
The Uganda shilling was on the back foot undermined by a pick- up in demand from the energy sector and importers.
Supply side was on the low side and couldn’t keep up with market forex requirements of the week. Trading was in the range of 3765/3775.
In the money market, overnight funds traded at an average of 6% while one week traded at 9%.
In fixed income market, a Treasury bill auction with 175billion on offer was held. Yields were generally flat, at 9.19%, 10.66% and 11.44% respectively. Undersubscriptions were registered for 91 and 182 days and market preference was more on the one year curve with bid to cover ratio of 1.787%.
In the regional currency markets, the Kenya shilling strengthened in a market characterized by weak dollar demand. Trading was in the range of 101.30/50. While in Tanzania, the shilling traded strong and was likely to sustain an appreciation tone, supported by dollar inflows from the mining, agriculture and tourism sectors. Trading was in the range of 2293/2303.
In the global currency and commodity markets, the US dollar index traded solidly lower. The greenback bulls have faded and the near term price uptrend has been negated to suggest a market top is in place.
Meantime, Nymex crude oil prices are near steady and trading around $ 51.50 barrel after dropping to a nearly five month low.
Market outlook suggest a range bound shilling as most players are expected to remain square amidst thin trading as markets await the new fiscal measures in the budget week.
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