Shilling enters November on weak footing

The shilling opened the week and the month of November trading at 3735/3745 levels in a day of quiet trading with balanced demand and supply as clients worked out their month's requirements, an Absa bank report indicates.  

"Overall, the local unit is likely to remain weak within the 3710 - 3760 levels during the week if corporate demand seen in the past two weeks remains robust," Catherine Kijjaggulwe, Head of Trading at Absa Bank Uganda said.  

Money markets remain liquid with healthy maturities expected on Thursday. Overnight remains within the 6.25% - 7.00% level. Bank of Uganda mopped sh480b in a 3-day Repo on Monday and will hold a sh245b Treasury Bill auction this Wednesday. 

The Kenya shilling was stable during Monday's session trading within 110.0 - 110.45 level all day. Overall, the KES is likely to remain on the back-foot trading within 109.70 - 110.70 range. 

The U.S. dollar hit one-month highs against a basket of peers on Monday and expected volatility in major currencies rose to the highest levels since April on investor jitters over the outcome of Tuesday's U.S. presidential election. The dollar index was last up 0.05% at 94.15 after earlier reaching 94.29, the highest since Sept. 29. The euro dipped 0.13% to $1.1632 and the greenback climbed 0.11% against the yen to 104.81 yen. 

The British pound also weakened after Prime Minister Boris Johnson announced over the weekend a one-month lockdown across England. Sterling fell as low as $1.2852 during Monday's session, the lowest since Oct. 7. 

 Crude oil prices fell far below $40/barrel after spending sometime trapped in a narrow range around $40/Barrel, particularly in the case of the global benchmark for crude, Brent crude. Brent crude for January delivery settled at $38.97 a barrel on Monday, while US benchmark West Texas Intermediate (WTI) crude for December delivery settled at $36.81 a barrel.