Kenya’s shilling opened at 102.00/20 but gained ground to strengthen to 101.90/102.10 as the Central Bank of Kenya sold dollars in the market to prevent further depreciation. However, the strength was short lived as market closed at 102.00/20 as corporate demand resumed ahead of the Christmas holidays. We expect the market to oscillate around 101.90 – 102.40
The U.S Dollar pushed higher against the Euro on Tuesday as investors turned their attention to the outcome of the Federal Reserve policy meeting starting later in the day, amid widespread expectations for a rate hike.
The Fed is widely expected to hike rates for the first time in a year on at the conclusion of its meeting on Wednesday, with investors pricing in a 100% chance of an increase, according to federal funds futures tracked Investing.com’s Fed Rate Monitor Tool. The U.S. Central bank will also announce updated economic forecasts and markets will be watching closely for signals on the outlook for inflation and the expected pace of rate hikes in 2017. Investors remained wary amid concerns that the Fed could strike a cautious tone on the outlook for policy tightening next year. Higher rates boost the dollar by making the currency more attractive to yield-seeking investors. The Euro slipped lower, with EUR/USD down 0.15% to 1.0620.
The annual rate of inflation in the U.K. jumped to 1.2% in November, the highest level since October 2014 as the fall in the value of sterling since Britain’s vote to leave the European Union pushed up the price of imports. The pound ticked higher after the report, with GBP/USD up 0.2% at 1.2705 from 1.2693 earlier.
Disclaimer: Whilst all considerable care has been taken in preparation of this Market Brief,which have been gathered from various sources. We cannot be held responsible should it be otherwise.