By Stephen Kaboyo
The Uganda shilling opened the trading week holding steady with demand and supply evenly matched but came under slight pressure mid- week as import demand rebounded.
Trading was in the range of 3700/3701. In the interbank money market, overnight funds traded at 7% while one week traded at 10%.
In the fixed income market, a 2 year and 5 year bond were auctioned with 120 billion and 140 billion on tap. Both tenors were oversubscribed with yields coming at 14.00% and 15.44% respectively.
In the regional markets, the Kenya shilling, strengthened on offshore flows targeting the government securities market but was expected to lose momentum as import demand build up.
Trading was in the range of 100.65/85.
In the global markets, the US dollar eased against the major currencies, falling to a more than six week low after the Federal Reserve indicated that it had abandoned plans to raise interest rates for the rest of 2019.
In the UK, the sterling gained slightly on the news that Prime Minister May had pulled off a deal to give more time to resolve when and how Britain will exit from the EU.
The forecast indicate that the local unit is likely to maintain the current levels as demand and supply continue being the major driver on the currency pair.
As the market enters the end month cycle, the US dollar conversions are expected to boost supply.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates call: 0414-580619, 0392-612648