Emerging market currencies weaken on Turkish political developments

Story link: Emerging market currencies weaken on Turkish political developments

Despite gains early in the session, the US dollar had weakened by mid-afternoon trade in New York as new data on inflation in March came in lower than expected and the rate of business activity in the Midwest in April was not as vigorous as had been anticipated. Analysts said that if a survey of national manufacturing activity due Tuesday followed the regional data, the Federal Reserve might be more likely to cut interest rates soon.

While the greenback rose as much as 0.5 percent in relation to the euro, by the middle of the afternoon it was trading even at $1.3650 against the shared currency. In addition, the dollar was 0.1 percent lower against sterling to $1.9990 and had dropped 0.2 percent to ¥119.40 versus the Japanese yen. The Canadian dollar, meanwhile, gained 0.9 percent on the US dollar to C$1.1065 on indications that the Bank of Canada might be ready to raise interest rates amid strong growth in the Canadian economy.

The Turkish lira weakened, falling 4.4 percent to TL1.3930 versus the greenback after Abdullah Gul was nominated as the ruling party’s presidential candidate. The decline affected currencies in other emerging markets, although analysts noted that most of these currencies have been trading at highs in recent weeks as investors were willing to take on more risk. The Slovak koruna dropped 0.3 percent to SK33.69 versus the euro, while the Polish zloty fell 0.7 percent to 3.7850 zlotys to the euro and the Hungarian forint was 0.8 percent lower to Ft247.50 against the shared currency.