Uganda Shilling ‘likely to test a new resistance level’

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The Uganda shilling nursed losses on banks/ corporate driven demand, as risk aversion was the dominant theme in currency markets.

The unit consistently traded above 3700 key level on both sides of the market, with strong indication that the market was likely to test a new resistance level.

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In the fixed income, a Treasury bill auction with 225 billion offer was held. Yields remained generally flat at 9.575%, 10.952% and 12.752% for 91, 182 and 364 day tenors.

There was strong appetite at the long end of the market that resulted in Bank of Uganda scooping 240 billion in total over the 175 billion that was announced for the 364 day.

In the regional currency markets, the Kenya shilling held its ground, supported by Non-government organization flows and portfolio investors participating in fixed income market. Trading was in the range of 102.40/68.

In the global markets, the US dollar recovered from the Trump announcement effect that banned travel from Europe. The depth and liquidity of the US market kept investors on the scramble for the US currency.

In other segments of the market, the Dow plunged 10%,the largest point drop since the Black Monday in 1987.While in commodities, oil prices saw their worst weekly drubbing since the 2008 financial crisis as coronavirus continued to knock demand. Brent crude traded at $33.08 per barrel.

In the coming weeks, the shilling is likely to remain bearish as the disruption of the global supply chains prevail with the dollar safe haven status holding effectively leading traders to continue their stampede out of low yielding currencies.

Alpha Capital Forex Bureau: For competitive Forex Rates VISIT Plot 12 KAMPALA ROAD-CHAM TOWERS SUITE 43: call: 0414-580619, 0392-612648

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