The local currency was firmer after marginal losses early in the week, with the recovery guided by subdued market activity as mid month tax obligations took center stage. Trading was in the range of 3655/65.
In the fixed income market, bonds edged weaker as navel gazing bond investors offloaded huge amounts of liquidity in the auction. Yield on the 3 year dropped to 13.997% from the previous 15.750% while the 10 year yield dropped to 15.970% from previous yield of 16.100%.
In the regional currency markets, the Kenya shilling was stable, but forecasted to weaken due to an uptick in demand mainly from energy sector. Trading was the range of 109.75/95.
In the global markets, the US dollar held strong supported by higher treasury yields and falling stock market as investors pondered on the Federal Reserve push back against expectation of any early interest rate hikes. In the euro zone,the common currency was slightly weaker extending its tumble against the greenback, while in the UK, the sterling suffered a similar fate following a warning from the Bank of England that the economic outlook remained uncertain.
Forecast for the local unit Indicate range bound trading, with pockets of demand expected. On the overall the news in the oil and gas sector leading up to the announcement of FID will generate a positive spin for the shilling
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