Turkish lira volatile over EU negotiatons, Euro and sterling weaken ahead of state bank meetings

Story link: Turkish lira volatile over EU negotiatons, Euro and sterling weaken ahead of state bank meetings

The Turkish lira was volatile on Monday on fears that negotiations toward Turkish membership in the European Union could be delayed by Austrian demands that Turkey be limited to less than full membership. However, most traders felt that a major sell-off was not likely unless Turkey were to quit the negotiations.

The Turkish lira gained 1.6 percent to TL1.5950 in relation to the euro, but it fell to $1.3405 versus the US dollar.

Sterling remained weak as it was expected that the Bank of England will not alter UK interest rates when it meets on Thursday. With US interest rates expected to continue rising, analysts see the UK currency continuing to weaken in relation to the dollar.

Sterling was down 0.6 percent to $1.7545 versus the greenback on Monday.

No change is expected in eurozone interest rates, either, when the European Central Bank meets on Thursday. The focus of analysts and investors will be the Bank’s comments on rises in inflation, continuing high oil prices, and increases in monetary growth.

The euro fell by 0.3 percent to SFr1.5514 in relation to the Swiss Franc and by 0.4 percent to ¥136.01 against the yen.

The US dollar was helped by strong manufacturing growth in the US as well as by a slightly weaker than expected Tankan survey from the Bank of Japan and by the assumption that US interest rates will continue to rise.

The greenback was up to ¥114.20 versus the yen after having been up to ¥114.24 in Asian trade, the highest in 16 months., was up to $1.1910 against the euro, and went as much as 0.8 percent higher to SFr41.3039 versus the Swiss franc before falling back a bit to SFr41.3024.