The currency was quite volatile during the week opening the session trading at the 3765/3775 levels and weakening to trade at lows of 3790/3800 before strengthening marginally to trade at the 3770/3780 levels.
Continued demand for dollars kept the unit on a back footing but healthy month-end inflows gave the currency some relief. Looking ahead as we head into the new month the currency is anticipated to trade within the 3720 – 3820 trading range and still expect some pockets of demand for dividends but also continued flows from NGOs, commodity exporters and other sectors.
Fairly liquid Money Markets during the week with overnight yields easing marginally to trade within the 9.00% -12.00% levels during the week. Bank of Uganda held a Treasury Bill auction on Wednesday and the 91-day, 182-day and 364-day tenors cleared at averages of 10.384%, 10.512% and 13.000% respectively. The next Monetary Policy Committee meeting is scheduled for 6th April 2023.
Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda at last some two-way flow was seen in the Kenyan market during the week with some inflows from the tea sector and Central Bank, but continued demand from the energy and manufacturing sectors kept the unit weak. The unit traded within the 130.50 -140.50 levels. The Monetary Policy Committee raised the Central Bank rate by 75bps to 9.50% citing continued inflationary pressures.
“The dollar was volatile during Thursday’s session losing some ground as bond yields edged lower as the market awaits the US Inflation print and the Fed’s upcoming action with regard to Monetary Policy,” she said.
The Euro rode on the dollar’s weakness to touch highs of $1.0926 (Shs 4110) on Sunday, closing the day at $1.0906 (Shs 4103).
The Pound followed suit, touching highs of $1.2393 (Shs 4662) as concerns of a financial crisis subsided during the week.
She said Brent Crude traded at $78.69 (Shs 296,046) a barrel and West Texas Intermediate traded at $73.98 (Shs 278326) a barrel with a marginal rise in oil prices after a drop in US stockpiles to a 2-year low and a stop in oil exports from Iraq. The expectation is for China’s demand and sustained lower production from Russia in the long term to lead to a rise in oil prices.
Gold traded at $1974.33 (Shs 7.4 Million) an ounce.