The shilling closed on the back foot on uptick in demand predominantly from importers. Trading held in the range of 3690/3700, while in the Kenyan market, the dollar scarcity continued to bite, driving the currency to its lowest levels to trade at 128.90/ 129.00.
A closer look at other regional currencies, most of the currencies lost substantial value in 2022 and on the overall the depreciation pressures are likely to continue in 2023 albeit to a lesser degree, largely due to tighter global financial markets conditions, weaker external demand and domestic price pressures
In the global markets, the US dollar paused its ascent after rise of jobless claims in the US implied possibly the easing conditions in the labor market and tempered expectations of further rate hikes by the Federal Reserve.
according to Stephen Kaboyo,Managing Director Alpha Capital Partners, an indigenous Ugandan firm focusing on sovereign asset management, foreign exchange trading strategies and financial markets advisory ” In the short run, the Uganda shilling will continue trading range bound.”
he adds:” Without a substantial shift in global risk sentiment or mitigation of the fundamental domestic challenges the economy is facing, the currency will trade sideways and will be unable to gain materially.
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