The G20 summit took place in Bali, Indonesia, on November 2022…
Turkish lira: roller coaster continues
Information is not investment advice
How much unexpected news the Turkish lira can handle? Just two months have passed after Turkish President Tayyip Erdogan fired the central bank’s governor and replaced him with Sahab Kavcioglu, who was expected to conduct a policy of low-interest rates. That is, the president created conditions for extremely high inflation and lower economic growth. However, the challenges for the Turkish lira were not over. On Monday, April 26, the Turkish lira plunged on the straightforward comments of US President Joe Biden. So, what exactly happened?
US policy has taken a new course
On April 25, the US President commemorated the mass killing of Armenians in the Ottoman Empire and called it a “genocide”. This refers to the events that happened at the beginning of the XX century. Turkey has denied that its predecessors in the Ottoman Empire were connected with acts of brutality against the Armenian people. The reaction from the Turkish side came right away. According to the Turkish foreign ministry, the USA has made a “grave mistake” that affects the mutual trust and friendship ties between the two countries. The news resulted in swings of the Turkish lira, as USD/TRY has spiked above the highs of March 22.
It’s worth mentioning that the Turkish assets are highly sensitive to the escalation of relations between the USA and Turkey given past US sanctions and economic threats.
What else is driving the TRY down?
The dovish policy by the Turkish central bank is another factor that affects the TRY negatively. According to analysts, the regulator will begin cutting rates in the middle of the year. They also suggest that the new governor may re-impose the expensive policy of selling foreign currency reserves to support the lira.
The USD spiked against the Turkish lira at the early hours of the European trading session. Still, sellers could control the momentum and hold the pair below the ascending trendline. We may expect bulls to try regaining their strength and pushing the pair towards 8.5. After that, reaching 8.5500 will be highly likely. On the downside, the support levels lie at 8.25 and 8.14.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?
Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.
In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.