Shilling Poised For Further Gains

In line with the improving state of macroeconomic fundamentals in Uganda and a rise in global risk appetite, the shilling has been strengthening continuously since July 2009. We turned bullish on July 27 and remain so, especially given the recent test of key resistance at UGX1,870/US$. In our view, a clear break of this area would set the stage for appreciation to UGX1,800/US$ (our end-2009 target); in the months thereafter, we see a move to UGX1,680/US$.

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