The shilling has maintained trading within a narrow range between Shs 3800 and Shs 3820 throughout the week. Healthy month-end inflows from NGOs and other sectors and flows from commodity exporters covered the pockets of demand seen from the usual sectors keeping the unit more or less range-bound. As we close October, we should continue to see the usual month-end flows and unless demand picks up significantly, the unit is likely to remain range-bound between the 3780 -3840 trading range in the near term.
Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda said Money Markets were fairly liquid during the week with overnight yields trading between 10% – 11.50%. Bank of Uganda held a Treasury Bill auction and yields in the 91-day, 182-day and 364-day tenors cleared at averages of 11.498%, 13.689% and 15.503%. Bank of Uganda will hold a 2-year and 10-year Treasury Bond auction on Wednesday 2nd November 2022.
The Kenya shilling is still under pressure despite interventions by the Central Bank in the past few days and there is continued demand for dollars. The unit traded within the 121 -126 levels and the unit is anticipated to remain weak and trade within the same range in the short term.
The dollar was strong on Thursday on the back of better-than-anticipated economic data, US GDP printed at 2.40% slightly surpassing expectations.
The Euro which had been strong earlier during the week slipped below parity as the European Central Bank hiked its benchmark rate by 0.75% to 2.00%. The Euro touched lows of $0.9965 (Shs 3794) before ending the session at $0.9971 (Shs 3796).
The Pound also retreated from its highs on Thursday as news of the appointment of the new Prime Minister slowly faded. It touched highs of $1.1645 (Shs 4433) but later slipped to close at $1.1564 (Shs 4403).
Oil prices dipped marginally but are anticipated to remain high after a positive US GDP data print, continued demand and also the prospect of tightening supplies. Brent Crude traded at $95.95 (Shs 365,340) a barrel and West Texas Intermediate traded at $87.68 (Shs 333851) a barrel.
Gold traded at $1648 (Shs 6.2million) an ounce.
