Dollar records slight gains in Tuesday’s session

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The greenback posted gains against the shilling during Tuesday’s trading session, supported by strong demand from offshore investors and local banks, which outweighed corporate flows.

The US dollar closed the day trading at 3770/3780, compared to opening levels of 3750/3760. Money markets remained liquid on Tuesday, with overnight rates averaging 9.52% according to Absa data.

The shilling is expected to trade in a wide 3650 to 3800 range, with uncertainty in global markets likely to keep sentiment fragile, according to market observers.

"There is a risk of further weakness of the shilling when taking into account the implied volatility. It signals more spikes ahead as oil and the dollar continue to move closely together," Stephen Kaboyo, managing director at Alpha Capital, said.