Shilling likely to fall further behind dollar next week

The Uganda Shilling depreciated to a three month low as demand surged mainly from energy and manufacturing sectors and the interbank. The shilling breached a key resistance level of 3400 and traded in range of 3405/3415,

In the government securities market, BOU offered sh160billion in  2 and 15 year bonds.  The market was oversubscribed with yields dropping across all the tenors.

In the international markets, the US dollar traded strong against all the major currencies, drawing its bullish stance on the upbeat US manufacturing survey report.

The British pound was bearish as concerns over Brexit remained on the cards coupled by the strength of the dollar on the expectation of US interest rate hike.

"Outlook for the shilling indicates sustained depreciation pressure  as demand side market activity remains high amid low fx inflows. Panic buying is likely to set in, as the currency tests new resistance levels," Alpha Capital Partners Stephen Kaboyo noted in a statement.