The Uganda shilling backtracked to hit record lows on demand jitters, testing a key level of 3600.
Demand was mainly from oil importers and some interbank activity.
In fixed income, government securities auction attracted huge demand as measured by the high bid to cover ratios across the entire curve. The yield on the 91 day held at 6.729%, while at the 6 month and One year, yields slightly went up 23 basis and 45 basis points to trade at 8.332% and10% respectively.
Globally the dollar trading was the classic buy the rumour, sell the fact as investors liquidated long dollar positions as the Federal Reserve got closer to making the tapering call.
In African markets, the South Africa rand, Nigerian Naira, Kenya shilling, Zambian Kwacha and the Uganda shilling sank to new lows as spike in oil prices spurred concerns over high inflation and drove investors out of risk driven assets.
Forecasts in the energy markets indicate that oil prices are likely to stay high for much longer as demand rebounds while supply remain tight.
The writer works with Alpha Capital Forex Bureau: For competitive Forex Rates VISIT Plot 12 KAMPALA ROAD-CHAM TOWERS SUITE 43: call: 0414-580619, 0392-612648