Shilling forecast: Pockets of demand to emerge as markets open after a long Easter break

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The Uganda shilling traded sideways, trading fairly within a stable range. Demand remained muted as the market slowed down for a long weekend.
Bid and ask were at Ugx. 3655/65.

On the liquidity front, Bank of Uganda was in the market picking up excess liquidity early in the week through a three day repo to the tune of Ugx. 561 billion.

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In the regional markets the Kenya shilling held steady, as demand remained low on account of the introduction of lockdown restrictions to curb a new wave of Covid-19 infections.

Trading was in the range of Kshs 109.60/80.

In the global markets, the US dollar was bullish, and maintained its strength against the major currencies as investors bet fiscal stimulus and aggressive vaccinations were likely to put the US on a path of fast economic recovery compared to other global economies.
In the Eurozone, the common currency suffered concerns that economic bounce back will be hampered by the third wave of Covid-19 infections.

Going forward, the shilling is expected to remain within range, with slight movements influenced by some pockets of demand likely to emerge as markets open after a long Easter break.

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