Shilling unstable with bias towards depreciation – report

The Ugandan shilling was stable on Tuesday although it was seen firming amid a slowdown in appetite for hard currency, a Centenary Bank report said.

Centenary Bank quoted the shilling trading at 3720/3860 buying and selling respectively on Wednesday.

The dollar was firm on Wednesday as stronger-than-expected U.S. economic data and hawkish Federal Reserve comments pointed to higher interest rates, while rate-hike bets in Europe also have the common currency clinging on above parity.

The euro rose 0.16% to $1.0032 in the Asia trade, which if sustained would make for a third session of gains in a row, though it is still nearly 2% down for the month. Eurozone inflation data is due at 0900 GMT.

South Africa’s rand weakened on Tuesday after the dollar rose as markets priced in higher interest rate hikes by the U.S. Federal Reserve to tame soaring inflation.

Market Outlook: The shilling is forecast to remain unstable with a bias of weakening against the dollar.

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