Currency update from Monday’s session

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The Uganda shilling weakened Monday as local players quickly rushed to cover their short dollar positions in the wake of geopolitical tensions in the Middle East. 

Traders said, this later cooled off as hard currency inflows from commodity exporters filled the early morning demand. The shilling, which had quickly weakened to 3610 / 3620 in the morning, closed the day trading at 3605 / 3615.

Money markets were liquid on Monday, prompting the Central Bank to conduct a 3-day mop-up repo according to Absa data. Overnight trades averaged at 8.86%, while one week averaged at 10.33%.

In the global markets, euro weakened against the dollar while the greenback firmed, after the U.S. attacked three key nuclear facilities in Iran over the weekend, putting markets on edge over Tehran’s response.

News reports show that Asian currencies were also nursing some losses from last week, following hawkish signals from the Federal Reserve.

A slew of Fed officials are set to speak in the coming days, potentially offering up more cues on the path of interest rates.