Forex experts watching the Uganda shilling trading against foreign currencies especially the US dollar say the unit opened the week weak but ended somewhat stronger.
Traders from Standard Chartered Bank said on Aug. 23 that the unit traded in the ranges of 2570 and 2595 against the US Dollar, weakening to 2590/95 early in the week and to close stronger at 2573/78 on Friday's session.
They said the corporate and inter-bank counters both saw minimal activity with subdued dollar-demand seen from the corporates.
"Also early in the week there was some news in the wires that Bank of Uganda was to increase its daily dollar-buying to boost the forex reserves and this could have triggered reaction by the interbank players to cover any short dollar positions pushing the market to the low of 2590/95," traders said, adding but lack of corporate demand enabled the inter-bank market to re-correct itself.
They (traders) expect next week the shilling to trade within the current ranges but with bias to weaken marginally with increased end-month dollar demand.
"2600 should provide resistance in the short-term," they added.
Stephen Kaboyo, the managing director at Alpha Capital Partners said positive news on US economy continued to play in favor of strong dollar against other major world currencies.
He said the market outlook suggest marginal gains for the shilling as end of month flows hit the market next week on the back of very limited corporate activity.
"Trading range expected to be 2555/75," he said.