Choppy trading during the week with the currency opening trading at the 3735/3745 levels, weakening briefly to touch lows of 3755/3765 and later settling at the 3730/3740 level as at Friday’s opening.
Pockets of Corporate demand were seen midweek but these were later outweighed by month-end inflows and inflows from other sectors like commodity exporters. Looking ahead as we head into the start of the new month of May, we are still likely to see some residual month-end flows spilling into next week. However, we should also see continued demand pockets from Corporates keeping the unit within the 3690 -3780 trading range.
According to Catherine Kijjagulwe, Head of Trading at Absa Bank Uganda, money Markets have been liquid throughout the week with overnight yields trading between the 10% -11.00% levels. Bank of Uganda was in the market during the week to mop up the excess liquidity through Repos and the Bank Of Uganda Bill.
The Central Bank held a Treasury Bill auction and yields in the 91-day, 182-day and 364-day tenors cleared at averages of 10.384%, 10.512% and 12.502% respectively. There is no government securities auction scheduled during the week.
She said Kenya shilling remained within a narrow range during the week with some decent inflows from the NGO and agricultural sectors that were able to meet the requirement on the demand side and interbank market activity picking up slowly. The unit is anticipated to trade within the 135.00 – 138.00 trading levels.
“The US GDP print of 1.10% on Thursday was lower than the market had expected, the 10-year US Treasury Bond traded at about 3.732%. The market continues to watch closely for the Fed’s likely action in terms of rate hikes amidst looming debt ceiling concerns. The dollar, though, continued to maintain its strength overall among most of the major currencies,” she said.
The Pound traded within a narrow range opening Friday’s session at the $1.2468 (Shs 4686) level. The Euro traded at $1.1007 (Shs 4137) on Friday morning.
Brent crude traded at $78.88 (Shs 296517) a barrel and West Texas Intermediate traded at $75.11 (Shs 282345) a barrel also impacted by lower-than-expected US Economic data and uncertainty of the Fed’s likely rate action in the coming months.
Gold traded at $1986.57 (Shs 7.4 Million) an ounce.