The Uganda shilling showed its volatile side in recent days having endured a torrid time last week crossing a key level of 3650 against a resurgent dollar. This week how’re the local unit has looked to regain some of its losses in line with emerging market movements.
Regionally, the Kenya shilling is expected to weaken on high demand against thin supply in the market, while the currencies of Zambia, Tanzania and South Africa are expected to remain broadly stable underpinned by adequate market flows.
Globally, the US dollar was heading to a second consecutive week of decline as sentiment stayed tilted towards high beta currencies, with markets trying to assess whether the dollar has scope to fall further or it is a temporary blip.
In the energy markets, oil tumbled to $83per barrel as forecast for a mild US winter put the brakes on the rally that drove prices to a 3 year high above $86.
Going forward, the shilling is likely to trade in a tight band, with a bias towards a slight appreciation, supported by conversions by foreign investors participating in the MTN IPO.
October 15 – October 22, 2021: Weekly financial markets review and outlook with Stephen Kaboyo
Stephen Kaboyo, Founder and Managing Director Alpha Capital Partners
