The Pound has advanced by around 0.5% against the Turkish Lira today, ahead of turbulent political times for both the UK and Turkey.
News out of Turkey has mainly focused on President Recep Tayyip Erdogan and his future political powers, which may be expanded depending on a constitutional referendum.
Last week’s Pound to Lira movement saw an overall appreciation, with the rate rising from 4.52 on Monday to 4.66 on Friday.
Pound to Lira Gains Follow Article 50 Announcement, despite Heavy Parliamentary Constraints
The Pound has advanced steadily against the Turkish Lira during trading this week, thanks to the processes behind Brexit becoming clearer every day.
The latest in this line has been the publication of the Article 50 bill, which must be approved by MPs so that the Government can trigger the article and start the UK’s exit from the EU.
While it had been assumed that MPs would have carte blanche to debate the bill and amend it accordingly, the fine print has shown that only five days will be allocated for this activity, which has enraged MPs who wished to soften the blow of Brexit on the UK economy.
Whether this fact ends up triggering Parliamentary revolts remains to be seen.
Turkish Lira Weakened as US Economic Strength Pushes TRY Down
The Turkish Lira slumped against the Pound today, due in part to the US Dollar rising on President Donald Trump’s economic policies.
In domestic news, concerns have been raised that President Erdogan may be poised to establish himself into Turkish politics for around 10 more years, based on constitutional reforms that might significantly increase what he can do as President.
GBP/TRY Exchange Rate Forecast
For the rest of this week and the next, Pound Sterling/Turkish Lira exchange rate movement may occur as a result of Parliamentary responses to the Article 50 bill, UK GfK confidence figures on Tuesday, the Bank of England (BoE) interest rate decision on Thursday and UK PMI results, spread over Wednesday to Friday.
In the former case, any signs from Parliament that the bare-bones Article 50 bill could be amended with clauses to ensure a smooth exit from the EU might increase demand for the Pound.
In terms of UK data, the only forecasts out at present have been for the BoE decision, which is set to see another UK interest rate freeze at 0.25%.
Of greater interest for investors will be any comments from BoE Governor Mark Carney, who may provide a forecast on the UK economy for 2017.
Notable Turkish data will consist of this Friday’s tourist arrivals results for December, an economic confidence index on Monday, December’s trade balance on Tuesday and next Friday’s inflation rate figures for January.
Previously, tourist arrivals fell by over -20%, reflecting how unsettled visitors are about entering the troubled nation at this time; another figure in excess of -20% is only likely to worsen the Lira’s condition.
Outside of these announcements, other news is expected to include President Erdogan’s announcement of when in April the referendum on constitutional change will be set.
The vote is intended to strengthen Erdogan’s powers as President if successful, which could further destabilise the nation under an increasingly authoritarian regime.