Currency update from Tuesday’s session

KAMPALA - The Ugandan shilling held steady on Tuesday, trading within the 3660/3670 range throughout the day as demand and supply for the dollar remained balanced, traders said.

In the domestic money market, liquidity was healthy with overnight trades averaging 11.06% according to Absa market data.

However, secondary market trading remained subdued as investors adopted a wait-and-see approach ahead of tomorrow’s (March 26) treasury bill auction, which is expected to provide further direction to the market.

Globally, the U.S. dollar index edged lower by about 0.13%, pressured by concerns over President Donald Trump's tariff plan, which has triggered long liquidation in the greenback.

Report show that the currency also faced headwinds following reports that reciprocal tariffs set to take effect on April 2 would be more targeted than the widespread measures initially threatened.

The euro gained modestly against the dollar, with the EUR/USD pair rising by +0.04%. The move was supported by comments from members of the European Central Bank's Governing Council, who suggested they could not rule out a pause in the ECB’s interest rate cuts.

Meanwhile, the USD/JPY pair saw a slight recovery as the Japanese yen strengthened on higher yields of Japanese government bonds (JGBs), supporting its interest rate differential appeal.  Reports show that the 10-year JGB yield climbed to a 16-year high of 1.587% reflecting increased investor confidence in Japanese assets.