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Ugandan Shilling Weakens Amid High Demand, Strong Dollar

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Ugandan Shilling Weakens Amid High Demand, Strong Dollar
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The Ugandan shilling showed signs of weakening last week, trading slightly lower due to moderate demand pressures from importers. The currency was quoted at 3675/80, down from the prior week’s close of 3665/70.

Internationally, the U.S. dollar strengthened significantly, driven by a post-election “Trump trade” surge that lifted the dollar to levels not seen since 2020, impacting most global currencies.

Analysts suggest that the continuation of Trump’s policies may drive U.S. economic growth, potentially leading to inflationary trends.

Patrick Kaboyo, Managing Director of Alpha Capital, expects a challenging week for the shilling starting November 10, citing global dollar strength and increased local demand pressures.

“The shilling may face pressure with a strong dollar globally and elevated domestic demand,” he commented.

Kaboyo also highlighted that, as the year-end approaches, demand for dollars from Oil Marketing Companies will likely rise as they anticipate a seasonal increase in fuel needs.

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