The Uganda Shilling was somewhat at crossroads, searching for fresh direction before making its next move as volatility was the order of business. Technical analysis of the market pointed to an oversold currency. Trading was in the wide range of 3590/ 3625.
In the fixed income market, investors continued to see value in high yielding instruments and high risk currency. Yields on the short end of the curve remained flat at 7.011% and slightly dropped on the 6 month and one year curve to trade at 9.950% and 11.728% respectively.
In the regional markets, the Kenya shilling recent rally slowed as a wave of dollar sell off gave way to rebuilding positions. Forecast indicate a weakening unit due to end month demand.
Trading held in the range of 108.05/108.20
In the global markets, the US dollar rebound against its peers was interrupted after the Central Bank of Canada signaled an interest rate hike and reduced its scope for its asset buying program. In the fixed income, the US yields remained softer as investors pondered on how long it will take before the Fed starts tightening monetary policy.
Outlook indicate that the Uganda shilling will remain vulnerable for correction, in a risk on, risk off market conditions, and will likely hoover around the 3600 key level.
April 16 – April 23, 2021: Weekly financial markets review and outlook with Stephen Kaboyo
Stephen Kaboyo, Founder and Managing Director Alpha Capital Partners
