The local currency was firmer in a short trading week on a continuing slide in appetite for forex. Other factors driving the shilling higher emanate from the global markets whereby the prevailing lower US interest rates continue to boost the appeal of riskier and high yielding currencies. Trading was confined in the range of 3540/3550.
In the regional markets, the Kenya shilling weakened on increased dollar demand mainly from manufacturing companies and fuel dealers and was expected to remain under pressure in the coming week. Trading held in the range of 106.95/107.15.
US Dollar holds steady
In the global financial markets, the US dollar held steady, staying near a one week high and was set for a weekly gain against other major currencies. Key economic readings in US showed bigger than expected rise in consumer prices and weekly jobless claims dropping to a 14 month low, intensifying concerns over rising inflation and possible interest rate hikes.
Outlook for the shilling indicate a range bound unit with little market activity expected as mid-month corporate tax payments take center stage. In addition the stable political environment post swearing in of the President and the global risk on sentiment will provide further support.