Rising Hopes of UK-EU Trade Deal Trigger GBP/TRY Exchange Rate Rally
The Pound to Turkish Lira (GBP/TRY) exchange rate rose by 0.4% today, thanks to a report that suggests the UK could retain EU single market access after Brexit.
The report, according to Business Insider, states that the European Parliament might permit the UK to retain at least partial access to the EU single market after it leaves the bloc.
This would be by an ‘association agreement’, under which conditions the UK may be able to get a trade deal that replicates its current free access to the single market.
The EU has previously been reluctant to give the UK the concessions of a post-Brexit trade deal, so this news has led to upgraded forecasts for the finalised Brexit agreement.
David Davis’s ‘Road to Brexit’ Speech Firms Pound to Turkish Lira Exchange Rate
Another factor keeping the Pound to Turkish Lira (GBP/TRY) exchange rate favourable today was a speech from UK Brexit Secretary David Davis.
Davis was speaking at a press event in Austria and did his best to improve the perception of Brexit by focusing on potential international cooperation in the future.
Specifically, Davis stated: ‘A crucial part of any [Brexit] agreement is the ability for both sides to trust each other’s regulations and the institutions that enforce them.’
‘Such mutual recognition will naturally require close, even-handed co-operation between these authorities and a common set of principles to guide them.’
‘Britain’s plan is [for] a race to the top in global standards, not a regression from the high standards we have now.’
TRY/GBP Exchange Rate Slides after Static Consumer Confidence Data
The Turkish Lira today fell in trading against the Pound (TRY/GBP) due to a disappointing consumer confidence print.
The confidence index score for February had been predicted to rise from 72.3 points to 73.7, but instead remained at the same level as January.
On the Turkish Statistical Institute’s measure, anything below 100 points indicates pessimism outweighing optimism.
Ultimately, this has meant lower confidence in the Lira among TRY traders.
Pound to Turkish Lira Exchange Rate Forecast: GBP/TRY Volatility Likely on Wage Growth Stats
The Pound’s (GBP) recent gains against the Turkish Lira (TRY) may not last, as GBP could slump following the publication of UK wage growth figures due for release tomorrow.
The pace of average earnings growth in December isn’t expected to accelerate, which will indicate that UK households are facing persistent wage squeeze conditions.
If UK wage growth remains subdued or even slows unexpectedly, GBP/TRY could fall sharply.
Further ahead, the Turkish Lira is forecast to fluctuate on Thursday based on predictions for upcoming economic data.
Capacity utilisation, measuring national productivity, is predicted to decline slightly, while on the other hand, a business confidence reading is tipped to show a higher score for February.