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Shilling gains ground against US dollar

The Market Commentary by Standard Chartered Bank says, "We expect the same trend on Wednesday (yesterday) with a slight bias on a stronger shilling.

Low price volatility was expected on Wednesday." Also analysts say, as few market players reduced their long positions as well as some dollar inflows made the shilling to gain some ground against the US dollar.

The NMB e-market report says the local currency on Tuesday strengthened by about two shillings against greenback as liquidity tightness in the money markets offered support to the TZS.

"This factor will likely keep the shilling strong versus the dollar, although impeding importer demand from the energy and manufacturing sectors may undo any significant shilling rally," stated the report.

The weakening dollar coupled with the broad retreat in global equity markets recently, with investors turning to oil for exposure to global economic growth pushed up Brent crude above 106 US dollar a barrel on Tuesday.

The situation was largely contributed by fresh unrest in eastern Ukraine, heightened tension between Russia and the West, but hopes Libya would soon resume oil exports.

The yen rose on Tuesday, as some investors trimmed bets against it after the Bank of Japan held off from additional easing and Governor Haruhiko Kuroda offered little indication that more stimuli was likely in the short term.

The Sterling rose to its highest point in three weeks against the dollar and a one-month peak against the euro after data on Tuesday showed UK industrial output rose much faster than forecast in February.

The pound has struggled to make more progress against both currencies over the past two months as doubts over the durability of Britain's economic recovery emerged and traders judged the bulk of the good economic news to be priced in.

The South Africa's rand hit its strongest level against the dollar this year in Tuesday's early trading session as positive momentum continued for riskier emerging market currencies.

Author: DAILY NEWS Reporter

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