By: Stephen Kaboyo
The shilling was on a strong bullish trend throughout the week underpinned by healthy inflows mainly from commodity exports and portfolio flows targeting Uganda government debt amid a slump in dollar appetite.
The unit hovered around the 3700 level.
In Kenya, the currency inched lower to trade at 140.3 on demand from a cross section of players.
In the fixed income market, treasury bill yields slightly declined with 91 benchmark rate printing just below 10%. Bank of Uganda scooped a little more on the 91 and 182 day tenors where rates were within their tolerance levels but cut off outlier bids on the 364 day.
In the global markets, the US dollar gained momentum, riding on the hawkish comments from the major central banks that raised fears that their tightening stance could drive the major economies into deeper downturn. Relatedly in the UK, the Bank of England raised its benchmark rate to 5%, the highest level since 2008.
A technical outlook of the shilling price action indicate that the unit is likely to trade within the confines of an ascending pitchfork and gravitate around the 3700 in the absence of any important market catalyst.
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