Negative Reaction to Turkish Rate Freeze Keeps GBP/TRY Exchange Rate Favourable
The Pound (GBP) has fallen against the Turkish Lira (TRY) today, although Sterling has still largely retained yesterday’s gains, when GBP/TRY jumped from 6.20 to 6.46.
Today’s most notable UK data has been Confederation of British Industry (CBI) retail activity stats, which showed a smaller than forecast slowdown in activity during July.
Turkish Lira to Pound (TRY/GBP) Exchange Rate Recovers after Tuesday’s Nosedive
The Turkish Lira (TRY) has edged slightly higher against the Pound (GBP) today, although the extreme losses seen on Tuesday have not yet been reversed.
The Lira dropped from £0.16 to £0.15 when the Turkish central bank left interest rates at 17.75%, instead of hiking to 18.75% as forecast.
This was attributed to the influence of President Erdogan and the Lira’s losses were down to fears that undue control is being exerted on the supposedly independent institution.
Pound Sterling to Turkish Lira Exchange Rate Forecast: Will BoE Boost GBP/TRY with Interest Rate Hike?
The coming week will bring a number of higher-impact UK and Turkish data releases; the most important UK offering will be 2nd August’s Bank of England (BoE) interest rate decision.
Economists are divided about whether the BoE will raise interest rates from 0.5% to 0.75%, which means a rate hike or a freeze could cause significant GBP/TRY exchange rate movement.
A few months ago an August BoE interest rate hike had seemed almost guaranteed, but over previous weeks UK economic data has disappointed traders and lowered confidence.
Given this situation, a rate hike could send the Pound to Lira exchange rate to fresh highs, while a disappointing rate freeze could erase Sterling’s recent advance in the pairing.
Weekly TRY/GBP Exchange Rate Outlook: Is a Lira to Pound Recovery ahead on Turkish Trade Data?
For Turkish Lira (TRY) traders, the next data that could prompt movement against the Pound (GBP) will come next week and consist of confidence, trade and inflation rate stats.
First up will be Monday’s economic confidence index, which could bring TRY/GBP gains if it shows a forecast-matching rise.
The bigger news will be Tuesday’s trade balance reading for June, which is tipped to show a Lira-supporting reduction of Turkey’s existing trade deficit.
Further TRY/GBP exchange rate gains are possible on Wednesday, if July’s Turkish manufacturing PMI shows an as-forecast rise from contraction to growth.
Rounding off the week, Friday’s Turkish inflation rate figures could bring additional TRY gains if the year-on-year figure slows from the currently eye-watering 15.39% rea