Live Rates

Nov 8, 2017

USD/TRY jumps to highest since January as Germany increases pressure on Turkey’s financing

  • Turkish lira resumes slide after a brief pause.
  • German government working to limit financing to Turkey.
  • USD/TRY up 11.5% since September 12.
The Turkish lira tumbled after reports showed that Germany was working on more restrictions on funds to Turkey. TRY hit a multi-month low versus the US dollar and a new all-time low against the euro. 
USD/TRY up again 
The US dollar is rising for the fourth time in a row against the Turkish lira. During the last hours, it accelerated the upside after the reports from Germany. USD/TRY jumped from 3.73 to 3.80. Then it moderated the rally and pulled back toward 3.77. The pair is headed toward the highest close since January. 
Bloomberg reported that “Germany is actively working to cut funding to Turkey from the country’s state-owned KfW bank, the European Investment Bank and the European Bank for Reconstruction and Development, according to more than a dozen government and banking officials, who asked not to be identified discussing the behind-the-scenes efforts. Some German commercial banks are also reviewing their exposure to Turkey, the officials said.”
They added that Merkel’s government is using its influence to restrict financing from international institutions to Turkey over an escalating political dispute, according to people familiar with the matter.
Closer to 2017 highs
The recent rally pushed USD/TRY closer to 2017 highs. Back in January, the pair reached a record high at 3.94. Afterward, it started a recovery that lasted until September, when it turned back to the upside after it bottomed at 3.38. 
From September lows it has risen 11.5%. If it manages to rise back on top of 3.80, the bullish momentum is likely to remain strong. Above, the area around 3.90 protects the pair of the record high and also from the 4.00 psychological level.

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