Ugandan shilling seen rangebound vs dollar

The Ugandan shilling is seen rangebound against the dollar on Friday in quiet trade after firming slightly versus the U.S. currency during the week, traders said.

At 0700 GMT, leading commercial banks posted the unit at 1,858/68 versus the dollar from Thursday’s close of 1,863/68.

“There’s been some interbank trade, but not much,” said one trader, who expected quiet trade for the rest of Friday.

The shilling has strengthened about 0.75 percent in the week to Friday. It has bounced back after falling nearly 40 percent from late last year to early 2009 and is seen on an appreciation trend in the coming months.

Investors expect resurgent mineral exports and foreign investor demand to support frontier African currencies in 2010, but an array of local factors could upset that trend.

Traders expected the Ugandan unit to firm versus the U.S. dollar in the coming days due to lack of demand, but the shilling could face some pressure as companies come in to cover year-end positions, traders said.

“You could see a stronger shilling due to lack of demand, but (it could face pressure) from year-end requirements,” said Luigi D’Souza, head of treasury at Crane Bank.

Reuters.