Outlook for the Uganda shilling indicate sideways trading

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BY Stephen Kaboyo

The Uganda shilling surrendered some of its recent gains, undercut by a rebound in demand by from commercial banks, energy and manufacturing.
Trading was in the range of 3735/3745.
In the interbank money market, overnight funds traded at 6% while one week funds traded at 9%.

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In the fixed income market, 170 billion was on offer for the Treasury bill auction. Yields edged up to trade at 10.124, 11.686 and 14.501% respectively.

In regional currencies, the Kenya shilling was firm, but was likely to come under pressure due to month end import demand amid excess liquidity in the local market. Trading was in the range of 100.65/85.

In the international currency markets, the greenback edged down against the major currencies after President Trump expressed concern about the currency strength, indicating that the dollar strength puts the US at a disadvantage.
At the same time he expressed displeasure about the Federal Reserve monetary tightening, saying he was concerned about the potential impact on US economy competitiveness.

Outlook for the shilling indicate sideways trading, with no distinct uptrend or downtrend . Trading is likely to remain in a narrow range as end month flows are like to pair up with the market demand.

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