By Stephen Kaboyo
The local currency held its ground and traded unchanged for most of the trading sessions on improved supply that kept the market in a net long position.
Demand remained subdued as most businesses opened their doors for the first time in over two months.
The shilling quoted at 3765/3775.
In fixed income market, a treasury bill auction with 145 billion on offer was held. There was descent uptake with tendered amount in excess of 220 billion.
Indications point to bidding up rates by investors as the financial year runs to a close. Yields were flat on the short end printing at 8.81% and 10.977% and marginally edged up to trade at 12.502% on the 364 day curve.
Currencies of the two major EAC partners states maintained a similar trend to UGX, with Kenya shilling unchanged all week , trading at 106.00/20 while the TZ shilling held at 2310/2320, with subdued demand cutting across.
The Euro and GBP rallied against the greenback, as the safe haven currency suffered a setback on mainly the resurrection of the US – China trade tensions and the prolonged mass protests in all the major cities of the US.
The dollar index was down 5% from the March peak when panic over COVID 19 gripped financial markets.
In the coming week the broader trend of the currency remains stable, with budget reading for FY 20/21 taking centre stage.
Demand is expected to remain depressed as the lifting of the lockdown measures take full effect.
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