Turkish Lira (TRY) Exchange Rate Battered Today by Domestic Terrorism

Published: Tuesday, 12 January 2016 17:00 BST - Written by David Woodsmith

STORY LINK Turkish Lira (TRY) Exchange Rate Battered Today by Domestic Terrorism

GBP/TRY Exchange Rate Plummets Following UK Data

The current week has seen the Pound Sterling to Turkish Lira (GBP/TRY) exchange rate fluctuate wildly; the UK currency opened with a sizable gain up to 4.4277 yesterday, but has dropped off dramatically today, having hit a low of 4.3656 in the wake of some crushingly disappointing UK economic publications.

Last week, the GBP/TRY pairing followed a similar path, as while the Pound was able to achieve a high of 4.4178 on Thursday morning, it nonetheless recorded a crash of 4.3550 at the end of the week. The causes for this sudden downfall were Friday’s UK Trade Balance figures for November, which showed a decline in the deficit overall but not to the expected level in two out of three cases.

For the week so far, the Pound rose yesterday on optimism that a deal could be reached by February between Prime Minister David Cameron and the leaders of the EU, over the terms of the UK Referendum with the EU. Building on this optimistic atmosphere, some speculators even estimated that the referendum vote itself could take place as early as June this year, compared to previous estimates that it would take until 2017 for the event to take place.

Manufacturing Production Slumps: Pound Sterling Exchange Rate Down Vs TRY, USD, EUR, Today

Today, the Pound has been damaged immensely by the most high-impact UK economic data out this week so far, the Industrial and Manufacturing Production figures for November. In most cases, forecasts were simply for repeat figures or declines that stayed above the 0 line, but the reality was far worse, seeing annual results drop respectively from 1.7% to 0.9% and from -0.2% to -1.2%, while monthly printings dropped respectively from 0.1% to -0.7% and repeated at -0.4%.
The news sent investors into a panic over the UK economy and as a consequence, the Pound fell across almost the entire currency board.

Turkey has had a similarly dramatic week so far, despite it only being two days in. The Lira was bolstered yesterday when the November Current Account narrowed to $2.1bn, an impressive reduction of -$3.689bn.

Turkish Terrorist Attack Sees TRY/USD Exchange Rate Fall to Historic Lows

Despite not having any economic releases due until the end of the week, the Lira was nonetheless devalued today by an unexpected terrorist attack in a popular tourist section of the capital city of Istanbul. Despite the horrific nature of this incident, however, the value of the Lira only dipped temporarily in the aftermath.

For the rest of the week, Pound Sterling/Turkish Lira exchange rate movement may occur as a result of Thursday’s Bank of England (BoE) Interest Rate Decision and Friday’s UK November Construction Output results, along with the Turkish October Unemployment Rate which is due on the same day.

At the time of writing, no forecasts had been made for a UK interest rate hike, therefore any signs in the minutes that an increase could be imminent (which is highly unlikely) would strengthen the Pound’s position considerably.
Construction Output is expected to fall from 1% to -0.1% on Friday, while Turkey’s Unemployment Rate has also been negatively forecast, with a rise from 10.3% to 10.4% on the cards.

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