Dollar claws back gains on Thursday

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The Uganda shilling lost ground against the dollar on Thursday, closing at sh3710/sh3720, weaker than the opening levels of sh3700/sh3710. 

The local currency's weakness was largely driven by demand from the manufacturing sector and local banks, traders said. In the near term, the currency is expected to trade within the 3695–3760 range.

Money market liquidity remained tight according to Absa data, with interbank overnight and one‑week rates averaging 10.00% and 10.58%, respectively. 

The Bank of Uganda further tightened conditions by mopping up sh277b through BOU bills.

In the global markets, the US dollar eased in Asian trading on Thursday, edging down 0.1% to 99.576 against a basket of currencies. The currency was described as sluggish as investors trimmed bets on Federal Reserve hikes and sought clarity on the U.S.-Israeli conflict.

In the commodities market, Brent Crude traded at $101.7 and WTI Crude at $90.58 on Thursday. The swings in prices were heavily influenced by the ongoing Iran conflict, according to Reuters.