The Uganda shilling firmed in volatile trade that saw both gains and losses. On one hand commodity flows boosted the supply side while pockets of demand were seen from the energy sector. The unit held in a wide range of 3790/3825.
In the regional markets, the Kenya shilling was stable trading at 119.75/95, however forecast indicate that the unit was likely to trade with a weakening basis as businesses resumed normal activity after the Supreme Court ruling on the elections dispute.
In fixed income markets, yields on the 5 and 10 year bonds traded at 16.250% and 18.500%. The Uganda governments bonds continue to closely track the current interest rate structure in the economy with outlook largely anchored on inflation trends going forward.
In the global markets, the US dollar took a breather from its surging rally as markets digested yet a more hawkish Fed rhetoric. In other majors, the Euro gained parity with the dollar supported by ECB rate hike while the sterling slumped following the Queen Elizabeth passing.
Outlook for the shilling point to moderate volatility as the dollar remains a force to reckon with over the remainder of this year into next, coupled with home made factors that are responsible for the lagging economic performance.
