The Pound found itself in high demand against the Turkish Lira towards the end of the week, despite increasing indications that the UK’s exit from the EU will not be entirely smooth.
The Lira’s recent losses have been triggered by concerns for the future of Turkey’s services sector, which has been hit hard by recent political unrest and terrorism incidents.
Last week, the Pound progressively fell against the Lira, starting trading at 3.89 before falling to 3.81 by Friday.
Pound Sterling News: Bank of England (BoE) Dovishness and ‘Brexit’ Fears Voiced this Week
This week, the Pound has failed to really excel against its peers, relying mainly on detrimental developments elsewhere to erode confidence in other currencies and raise its appeal by extension.
Mostly, the UK currency has been held back by ongoing ‘Brexit’ concerns, which have included the estimate that the taxpayer
will pay millions
to facilitate negotiations as well as
comments from Italy’s Prime Minister
that the UK cannot get better rights outside of the EU compared to within it.
One of the most damaging developments came on Wednesday, when BoE official Nemat Shafik stated that
more monetary policy easing is likely
, potentially even before the late November Autumn Statement.
Turkish Lira Update: Dramatic Tourism Crash Follows Attempted Coup and Bombings
The Turkish Lira has been struggling in the wake of subpar domestic data this week.
The data in question has concerned tourist arrivals on the year in August, which have fallen by -37.96%, a slight increase on July’s -36.7% result.
Such an alarming decline in the number of visitors to the country is a result of widespread unrest within the nation as well as extremely cautious international perceptions.
As well as being rocked by countless terrorist bombing incidents in and around the capital of Istanbul, perceptions of Turkey as a potential tourism destination have also been soured this year by July’s brief failed coup attempt, which resulted in waves of arrests and crackdowns on military and legal officials.
The coup response also included firing health professionals and teachers, which has raised serious questions about how to find replacements for these important professions.
GBP/TRY Exchange Rate Forecast
For the remainder of this week, Pound/Turkish Lira exchange rate movement could come from Friday’s UK September GfK confidence and Q2 GDP figures, as well as the Turkish trade balance result for August, also due on Friday.
During the coming week, UK manufacturing, construction and services PMI results are due from Monday to Wednesday, while Turkey will announce its September inflation rate result on Monday as well.
In brief, Friday’s mentioned UK ecostats are all forecast to rise, while the current Turkish trade deficit is predicted to reduce slightly.
Next week, all of the UK’s PMIs are expected to reach or remain in the 50-plus growth range, while Turkish inflation is forecast to rise on both the month and year in September.