Sober, ati the dollar is getting stronger each day due to Osama's death. They got him!

=>It's the KES getting weaker and it's good for exports esp tea and flowers.

@ycsun, true though the net effect is likely to be positive for this sector. Remember that some factories generate their own electricity and use firewood for boiler fuel as opposed to furnace oil. Again VAT is refundable. P.S. TeaAuction is carried out in dollars which are converted into more KES in case of a weaker KES.

Is this movement being caused by the weakening of the KES or by the strengthening of the USD?

euro security is compromised by possible multiple government debt defaults making the dollar the preferable currency to use for trade. Thus the dollar appreciates in value. Though the dollar is also volatile due to its trade deficit and the outcome of the talks with Iran. The key pieces to watch out for are the politics of ecb and the state's of the major governments in europe.

Plus china applying to be part of the SDR currencies with its recent application to the IMF might signify a move to fill the gap between the dollar and the euro as the preferred currency of trade. But as of now i expect profits to be made between the fluctuations of the dollar and the euro as the situation sorts itself out.