Stock markets and bond yields have continued to trend lower as the Turkish lira saw a savage opening in the Asian session last night, points out the research team at Danske Bank.
Key Quotes
“The USD/TRY crossed the 7.23 level before the TRY rebounded back to below 7.00 against the USD in a thin market.”
“On Sunday, President Erdogan urged Turkish businesses to stay away from FX purchases and to support the TRY.”
“The massive sell-off in the TRY started last Friday, when in his speech Erdogan spooked investors by choosing to continue his path of confrontation with the US and calling for Turks to hand in their US dollar, EUR and gold holdings.”
“Shortly after, TRY’s turmoil deepened on President Trump’s tweet, which mentioned a doubling of tariffs on metals, citing bad relations with Turkey.”
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