Chief Analyst at Danske Bank Arne Rasmussen notes the Turkish currency is seen under further pressure in the near term.
Key Quotes
“Emerging markets (EM) currencies may be eyeing some relief as the momentum in US yields and USD seem to be fading a tad”.
“However, despite the Turkish central bank’s emergency rate hike earlier this week, TRY selling pressure remains as markets speculate the willingness to tighten the overheating economy remains limited within Erdogan’s government ahead of the June election”.
“More emergency hikes are likely in our view with the lira set to be under continued pressure”.
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