It was sideways trading for the local currency crossing over into the new fiscal year, largely underpinned by a sharp slowdown in demand as Covid-19 lockdown measures kept business activity at the bare minimum. Bid and ask quotes held at 3540/50.
On another note, the IMF loan approval for the Government of Uganda mainly for purposes of supporting Covid-19 crisis economic recovery generated positive sentiment for the currency.
In regional currencies, the Kenya shilling weakened a notch, undercut by demand from energy and manufacturing and was likely to lose more ground on sustained demand. KES traded at 107.85/108.05.
Global markets
In the global financial markets, worries over the spread of Delta Covid-19 variant now present in 90 countries around the world are emerging. It is likely that the new strain will disrupt the global growth rebound.
In currencies, the US dollar held a bullish stance, strengthening against the world majors backstopped by strong US job data that showed a solid rise. The solid job showing was beginning to upset the assumption that US interest rates will remain ultra-low for some time to come.
Outlook suggest that the shilling will remain flat against the dollar in the coming day as most economic activities that generate demand are literally shut as tough lockdown measures weigh in.
