Currency update from Monday’s session

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The Uganda shilling was little changed on Monday as dollar appetite continued to wane ahead of the monetary policy committee announcement on Tuesday.

The local unit traded at 3655/3665 levels all day. The Bank of Uganda (BOU) is scheduled to issue a monetary policy statement that is likely to determine the direction of the market. The BOU has held the central bank rate at 9.75 over the last seven months.

Money markets were liquid during Monday’s session, according to Absa, with overnight and one-week trades averaging at 10.88% and 11.35% respectively. BOU will conduct a Treasury Bond auction on May 14 worth sh990b, where the benchmark 3-year, 10-year and 20-year maturities will be reopened.

In the global markets, the U.S. dollar surged higher on Monday, supported by the announcement of a trade deal between China and the U.S. over the weekend, according to reports.

 The Dollar Index, which tracks the greenback against a basket of six other currencies, rose 1.3% to 101.455, trading at a one-month high.

The EUR/USD traded 1.2% lower to 1.1109, with the single currency hit hard as traders surged back into the dollar in the wake of the news of a U.S.-China trade deal.