The Kenyan shilling recouped some losses on Wednesday after taking a beating in the previous session, when it broke the Sh80.00 mark for the first time in more than a year, traders said.
The shilling continues to be affected by the euro's woes and is seen coming under additional pressure this week from typical end-of-month investor demand for the greenback.
At 0830 GMT, commercial banks quoted the local currency at Sh79.70/80 against the dollar, marginally stronger than Tuesday's close of Sh79.90/80.00.
On Tuesday the unit touched Sh80.10/20, a level last seen on April 9, 2009, according to Thomson Reuters data and traders.
"The market is still nervous about the debt crisis in Europe, but it is trying to consolidate. This has caused the slight improvement this morning," said Commercial Bank of Africa trader Joshua Anene.
"The expected end-of-month demand (for dollars) is so far muted, but the appearance of end-of-month demand will complicate the outlook for the shilling," Anene said.
Traders see the currency dipping again later this week.
"The current crisis in the euro zone continues weighing down heavily on the local unit," Bank of Africa said in a market report.