The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate has trended between 4.2969 and 4.3641 over the past seven days.
Trading in the run-up to Christmas was volatile, despite little data being available, as thin trading volumes exaggerated currency movement and gave more influence than usual to normally low-volatility data releases. The Turkish Lira was harmed on the 28
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by news that business confidence and capacity utilisation had both fallen, despite being predicted to rise slightly. Business Confidence dropped from 105.2 to 102.2, while Capacity Utilisation slipped down from 75.9% to 75.8%.
Pound Sterling lost ground on the 29
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despite news that year-on-year (YoY) tourist arrivals in Turkey had dropped again in November. Although still a negative result, the actual rate of -0.53% was much better than the forecast decline of -3.5% and a big improvement on the previous -4.00% drop, suggesting that tourism in Turkey could soon begin to increase again.
The release of Nationwide House Prices figures for the UK on Wednesday 30
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caused a momentary slump in the GBP/TRY exchange rate after a larger-than-expected rise further fuelled concerns that the UK is currently in a housing bubble. Non-seasonally adjusted (n.s.a) house prices rose 4.5% in December, this was up from 3.7% and a significantly larger number than the 3.8% forecast. Seasonally adjusted house prices jumped up 0.8% month-on-month (MoM), double the predicted increase.
Pound Sterling was quickly able to recover losses and extend a strong lead against the Lira following news that Russia would impose more economic sanctions on Turkey, beginning on the 1
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of January 2016, in response to Turkey’s downing of a Russian warplane at the end of November. The new sanctions include the banning of Turkish activities inside Russia for tourist, construction and lumber companies, among others.
Trade data from Turkey, released this morning during the London session, has shown that the trade deficit widened by more-than-expected. Russian sanctions, prohibiting the import of certain Turkish goods, helped contribute to the deficit, which widened from -US$3.62 billion to –US$4.24 billion in November. Trading has been volatile since: although the figures are worse-than-expected, in terms of year-on-year change (YoY) Turkey’s trade deficit has actually decreased by almost half.
Both the UK and Turkey see a sizeable amount of data released on Monday 4
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, starting with inflation data for Turkey and PPI figures. UK lending figures and the Markit/CIPS Manufacturing PMI follow later in the day. The data could see a significant movement in the GBP/TRY exchange rate after muted movement in the run up to the Christmas holiday period.
The GBP/TRY exchange rate is currently trading in the region of 4.3219.