Earlier this week the Turkish Lira plummeted against several of its peers amid reports that an Ankara state prosecutor began investigating two leading political figures.
With Deputy Prime Minister Bulent Arinc and Ankara Mayor Melih Gokcek each accusing the other of collaborating with enemy states, a formal enquiry was launched. The subsequent threat of political instability saw the Lira post broad-based losses.
The Lira lost 0.8% against the US Dollar to trade in the region of 2.5619 and economist Tim Ash noted; ‘Internal AKP politics is now getting very interesting. Arguably, with the weak state of the formal opposition, the main challenge to [President Recep Tayyip] Erdogan is appearing from within.’
On Wednesday Turkey’s Business Confidence data failed to show the improvement in sentiment expected by economists. The gauge advanced from 103.4 to 103.5 rather than climbing to 105.2 as forecast.
The nation’s Capacity Utilisation figure for March also printed at 72.4% instead of the 73.18% projected.
The Lira remained trading in a softer position against the US Dollar in spite of the ‘Greenback’ posting declines against a number of other rivals as a result of less-than-impressive US Durable Goods Orders data.
It had been expected that durable goods orders would climb by 0.2% in February, but they actually plummeted by -1.4%. Durable goods orders excluding transportation fell by -0.4% on the month following a negatively revised decline of -0.7% in January.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate also extended gains as the week progressed, advancing by 0.3% on the day’s opening levels to achieve a high of 3.8260 on Wednesday.
The only other Turkish data to be aware of this week is the nation’s Tourist Arrivals figure, due out on Friday.
Next week there are several more influential Turkish ecostats on the cards, including trade balance figures, fourth quarter growth data and the HSBC Manufacturing PMI for March.
The growth data is expected to show a moderate acceleration in the final three months of the year while the gauge of Turkey’s manufacturing sector is expected to print at 49.9, up from the previous reading of 49.6 but still below the 50 mark separating growth from contraction.
The week ends with Turkey’s Producer Price Index and inflation data for March. Given that the Turkish government has been pressuring the nation’s central bank to get inflation under control, these figures may spark notable Lira movement.
The US Dollar to Turkish Lira (USD/TRY) exchange rate is currently trading in the region of 2.5558.