Owing to immense economic instabilities on both sides of the exchange rate pairing, Pound Sterling has made dramatic losses and gains against the Turkish Lira over the course of the last seven days. Last week’s best GBP/TRY rate was 4.2154 while its worst was a figure of 4.0691.
Surprising UK Referendum Development Sent Sterling Crashing Last Week
The biggest source of movement for the Pound came early last week, with the UK currency diving across the board on Monday and hitting notable lows against a majority of its competitors. The triggering event in question was the announcement from London Mayor Boris Johnson that he would be campaigning on behalf of the ‘Out’ campaign.
The supposed influence of Johnson in the field of UK politics dealt a major blow both to the ‘In’ campaign and also to investors who had been hoping for a ‘quick and quiet’ UK referendum campaign. Following Johnson’s declaration, a large number of UK politicians and business leaders came out of the woodwork to take their own stands on either side of the argument.
Sterling Softened Today by Third Day of Weak PMI Figures
Disappointment has been the watchword of Sterling investors today, with the Pound sliding overall on the third falling PMI result for February seen in as many days. Tuesday brought the manufacturing variant, yesterday saw construction inch closer to contraction and today has seen the services and composite PMIs respectively come in at 52.7 and 52.8 points, down from over 55.5 points in both cases.
Turkish Lira Movement Decided by Inflation Reduction and Rising Debt
The Turkish Lira’s rollercoaster of movement was triggered by domestic data last week, for the most part. Monday opened on a low note, with central government debt for January rising from 677.6bn to 685.8bn.
Interest rates remained frozen at 7.5% on Tuesday, which was criticised by some economists who saw the rising inflation as an increasing source of pressure on the national economic infrastructure.
This week, the Lira has been devalued by Tuesday’s falling February manufacturing PMI stat which has danced on the edge of contraction, while today’s inflation rate and PPI drops for February have done little to invigorate the currency’s value.
This and Next Week’s GBP/TRY Exchange Rate Forecast
For the remainder of this week as well as the week to come, Pound Sterling/Turkish Lira exchange rate movement may occur as a result of Tuesday’s Turkish industrial production and retail sales stats for January, as well as Wednesday’s UK industrial and manufacturing production figures for the same month.
High-impact economic events are effectively clumped together next week, with the last UK ecostats being Friday’s trade balance and construction output results for January.