By Stepehen Kaboyo
The Uganda shilling dipped following an uptick up in corporate and interbank demand. Trading was in the range of 3695/3615. In the interbank money market, rates held at previous week’s level to trade at 5% for overnight funds and 9% for one week.
In the fixed income market, a 2 year and 5year bonds were on offer. Yields were on a slight upward trend at 11.255% for a 2 year and 12.636%. The Bank of Uganda target to mop 120 billion was achieved.
In the regional currency markets, the Kenya shilling strengthened, hitting a 2 year high on account of major players cutting long dollar position to meet their cash reserve requirements. Trading was at 100.35 KES to a dollar.
In international currency market the US dollar, gained ground against the world majors on higher US Bond yields and strong expectation of more rate increases from the Federal Reserve, while the pound sterling plunged to a near two week low on dovish comments from the Governor of Bank of England.
In the coming week the shilling is likely to be under renewed pressure as end month demand kicks in, with projected higher demand from importers . Shilling is expected to weaken, breaking trend lines and establishing new support and resistance levels.