The Uganda shilling was volatile, trading near a three and half year high against the greenback, breaching the key support level of Ugx. 3600.
The shilling hit that level in the last quarter of 2017 when it traded at Ugx. 3,659/3,600.
Factors that drove the sharp appreciation were largely a general slowdown in demand and seasonal conversions.
While in the region, the currency of Uganda’s largest trading partner followed a similar trade.
The Kenya shilling strengthened to a nine month to trade at 106.80/107.00.
In the fixed income, Uganda’s yield curve, an indicator of risk sentiment in the bond market, remained fairly flat after gradual downward pressure as institutional investors continued to pack funds in government securities.
Bond yields for a 2- year and 5-year reopening sprinted at 13.000% and 15.1000% respectively.
In the global markets, the US dollar sank to a four week low against its peers as treasury yields pulled back from the last month surge with investors increasingly convinced that the Federal Reserve will keep interest rates low for some time.
In the coming days the shilling looks set to remain volatile as pockets of demand spring up on improved corporate requirements as local firms source hard currency for their imports and a bit of dividend payments.
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