Risk of Turkish Currency Weakening, Will There Be a Quiet Session in the Future?
Buying and selling TRY was recorded at a negative number, because risk-off was extended to Central Asia. This led to a further decline in the Turkish currency, Lira after the country’s President Erdogan opposed steps to ease the economic and currency crisis. Most Emerging Market (EM) – ZAR, RUB, INR currencies rolled out in sync with TRY while the Euro and Aussie also extended losses last Friday. EUR / USD touched a thirteen-month low near 1.1370 on fears of Turkish contagion in the European banking sector. However, the safe-haven currency was the most profitable, after knocking USD / JPY closer towards 110. As a result AUD / JPY, the biggest loser this session, fell more than 1% to 80.00.
Main Topics in Asia
Black Swan Friday (which should have come) when it happened – Turkey’s risk and a wave of US dollar funding
The open market today of course follows last Friday’s drama on TRY. However, before looking into the ins and outs of TRY, there is something far more worrying that the market is bringing back to the fore.
Erdogan Turkey spokesman: “campaign disinformation” Reason for Rejection
The communications director of Turkish President Erdogan, Fahrettin Altun, was brought to Twitter in the early hours of the week to warn the market that traders had misinterpreted Turkey’s current position.
USD / TRY – Dear Turkish finance minister: If you don’t succeed at first, then don’t TRY or TRY again
Turkey’s finance minister tried to calm down market fears and the subsequent selloff in the nation’s currency failed at the opening of this week.
The Fall of Turkish Lira Causes Concerns for Developing Markets – WSJ
According to the Wall Street Journal, the fall of TRY in the face of increasing US tariffs on aluminum and steel creates uncertainty for investors in emerging markets.
Trump threatened Canada: ‘Will the car tax if we can’t make the NAFTA deal!’ – Twitter
US President Donald Trump took Twitter on Saturday and threatened to impose automatic tariffs in Canada, if the US and Canada fail to reach an agreement on the North Atlantic Free Trade Agreement (NAFTA).
Main Focus in Front
The market is preparing for a quiet start to an important week ahead, in terms of economic releases, without macro news due to this card Monday from Euroland, Britain and the US map. However, developments around Turkish Lira and sentiment on global equities will continue to drive FX markets today.
Focus shifted to British jobs on Tuesday and US retail sales data on Wednesday for a short-term trading boost.
EUR / USD: Focus on Turkey and euro zone banking stocks, enter the highest value for 16 months
The common currency can fall below the immediate support of the 200-week moving average at 1.1357. EUR can regain composure if the announcement of Turkey’s economic action plan, which will be released today, will make a sharp bullish reversal in Lira.
GBP / USD touched the brakes near 1.2750 on a quiet Monday
Monday’s economic calendar has no data for the UK, and traders will focus on Brexit headlines for the day as well as new Turkish developments.
UK: Key data for next week – Danske Bank
Analysts at Danske Bank present a review of economic reports next week from the UK.
Many important events for next week – Nomura
Analysts at Nomura offer their views for this week next week.
To facilitate your forex analysis, try opening the following Portfolio page!