Shilling to maintain stability stance in a low demand market environment

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By Stephen Kaboyo

The Uganda shilling maintained a stable range in a market characterized by thin trading as demand fizzled out against sufficient dollar supply.
Importers remained on sidelines as most foreign exchange requirements seem to have been met.

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In fixed income space, Treasury bill yields edged up across the curve in 220 billion auction. 91 and 182 day tenors were undersubscribed. Yields printed at 8.499%,10.500% and 11.550%.

In regional currency markets, the Kenya shilling surged against the dollar backed up strong inflows from remittances and offshore investors participating in the securities markets.
Trading was in the range of 101.25/45. While in Tanzania, the shilling followed a similar appreciation trend on account of flows mainly from cashew nut exports, trading at 2298/2308.

In the global markets, the US dollar shook off earlier losses and climbed higher against other major currencies. Risk sentiment seesawed amid mixed signals on whether the US and China could wok out a partial deal to end the trade tensions.
In The UK, the pound struggled as the rebound in the dollar and election manifesto from the opposition labor party fueled some profit taking on the currency.

Outlook for the shilling indicate that currency will likely maintain its current stability stance , trading in the range of 3680/3700 in a low demand market environment. Support is expected from offshore flows targeting the debt market.

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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