Shilling stable as activity slows ahead of festivities
The Ugandan shilling maintained a stable position against the dollar, supported by remittances amid moderate import demand ahead of the festivities.
The currency had weakened during the week to touch lows of 3560/3570, but continued flows led to its strengthening during Friday’s session to trade at the 3550/3560 level as at l opening of the week.
Stephen Kaboyo, Managing Director of Alpha Capital Partners, said: “The outlook for the shilling indicates relative stability through the end of the year, supported by seasonal flows as market activity weakens during the holiday season. “
Catherine Kijjagulwe, Head of Trading at Absa, said: “The unit is expected to keep trading on a fork as activity slows towards the festivities with activity picking up with a view to reopening the economy towards the end. December 2021. The expected range is between 3,530 and 3,590 in the short term.
The Kenyan shilling remains under pressure, despite some cash inflows at the end of the year. Demand remains robust with offers as high as 114.50.
Players expect the currency to likely remain weak in the 113.00 – 115.00 trading range in the near future.
In global markets during the week, the Federal Reserve finally announced the end of its bond buying program and three likely interest rate hikes in 2022 to curb inflation.
The European Central Bank has concluded to leave its benchmark rate unchanged and to end its stimulus measures during a pandemic.
The single currency hit a high of $ 1.1360 and closed the day at $ 1.1328 on Thursday.
The Bank of England surprised market participants and raised interest rates by 0.25%. The currency traded at a high of $ 1.3374 and closed comfortably at $ 1.3319 on Thursday.
Despite fears over the new Omicron variant, demand for oil in the United States has increased, keeping oil prices high. West Texas Intermediate hit $ 72.04 per barrel. Brent Crude rose to $ 74.76 per barrel. Gold was trading at $ 1,807.