By Stephen Kaboyo
The Uganda shilling held its ground on account of sagging demand as interbank market players unwound positions.
Trading was in the range of 3675/3685.
In the shilling interbank market. Overnight funds quoted at 7% while one week funds traded at the previous level of 10%.
In the fixed income market, the 2 and 5 year bonds yield to maturity prices came out at 13% and 15.1% respectively with significant uptake that resulted in oversubscription.
In the regional currency markets, the Kenya shilling weakened and was seen softening further due to surging dollar demand from the energy and manufacturing sector coupled with excess liquidity in the market despite the Central Bank’s effort to mop up.
Trading was in the range of 103.80/104.00.
In the global markets, the US dollar hit its highest level since May 2017.
The aggressive easing of the major economies sent investors into the reserve currency. The upbeat US economic data, which was a strong indication that it was not all doom and gloom for the US economy also gave the dollar an edge.
In the UK the pound fell close to a 3year low as turmoil and confusion on Brexit continued in British parliament.
Outlook for the shilling suggest sideways trading driven by matched demand and supply in the market.
In the very short term, no major event is expected to move the currency, however in the medium to long term, the news with respect to oil sector developments have created a negative sentiment on the shilling, with hopes of strong inflows alongside the final investment decision being squashed.
Alpha Capital Forex Bureau: For competitive Forex Rates VISIT Plot 12 KAMPALA ROAD-CHAM TOWERS SUITE 43: call: 0414-580619, 0392-612648