Pound Sterling to Turkish Lira Exchange Rate Forecast: GBP/TRY Down from Recent Highs

Pound to Turkish Lira Exchange Rate Sheds Almost Half of Last Week’s Surge

Turkey and the strength of the Turkish Lira (TRY) continued to dominate financial news this week, but the currency rebounded from its worst levels and as a result the Pound Sterling to Turkish Lira (GBP/TRY) exchange rate has fallen back.

Following last week’s significant surge from 6.60 to 8.21, GBP/TRY briefly hit a high of 8.95 on Monday before slumping as the Lira finally started to recover.

At the time of writing on Friday, GBP/TRY was near the level of 7.50 as the Lira’s recovery rally slowed. This was due to concerns that the US could continue to ramp up trade tariffs against Turkey.

The Lira was able to recover more easily against a relatively limp Pound (GBP) as this week’s UK data has failed to lighten the load of Brexit uncertainty.

Pound (GBP) Exchange Rates Fail to Advance Despite Jump in UK Retail Activity

This week’s UK data generally beat expectations, but despite this demand for the Pound (GBP) has been limited.

Tuesday’s UK unemployment rate beat forecasts, but was dampened by an underwhelming UK wages report.

The data was followed by a slightly stronger than expected monthly inflation rate figure on Wednesday, but overall UK inflation indicated that the cost of living squeeze is persisting.

Thursday’s UK retail sales results did come in well above expectations in every print. Thanks to hot weather and the World Cup boosting consumer confidence, online retail activity surged and was able to offset slightly weaker activity on the high street.

However, ultimately investors remained too concerned about how the Brexit process or the possibility of a ‘no deal’ Brexit could impact Britain’s economy.

This left Sterling unappealing despite the week’s decent ecostats, and the British currency remained limp.

Turkish Lira (TRY) Exchange Rates Slip amid Threat of US Trade Tariffs

Attempts from Turkey’s government to calm markets following a steep selloff in the Turkish Lira (TRY) appeared to have a positive impact on the emerging market currency this week.

Most of the week’s GBP/TRY movement came from the Turkish Lira’s notable recovery, which saw the currency claw back almost half of the significant losses it experienced last week.

Part of this rebound was profit-taking too, as investors indulged in buying the embattled currency from its cheapest levels.

However, some economists remain unconvinced that Turkey can really avoid a full blown currency crisis, especially as the US has indicated it may keep ramping up protectionist trade tariffs against Turkey.

This week’s attempts from the government have bought the Lira some time, but are unlikely to be a basis for a full currency recovery acording to some industry experts.

Pound to Turkish Lira (GBP/TRY) Forecast: Developments in Turkey Still in Focus

Next week’s economic calendar will be a little quieter, but with by far the most influential news in recent weeks being related to Turkey’s financial woes, those developments are likely to remain the primary driver of GBP/TRY.

The Turkish Lira remains at risk of experiencing notable volatility as the issue develops, so large movements are to be expected.

If the US continues to ramp up its trade tariff plans against Turkey or if Turkey’s other economic woes become more apparent, investors may become less convinced by attempts to calm markets. This would leave the Turkish Lira (TRY) plunging again.

On the other hand though, if Turkey begins to show any convincing plans to get Turkish inflation under control and combat US protectionism, the Lira will strengthen.

Next week’s main UK data includes public sector net borrowing on Tuesday, and CBI’s factory stats on Tuesday and Thursday.

As these figures are relatively low influence, the Pound to Turkish Lira (GBP/TRY) exchange rate is more likely to be driven by potential Brexit developments or the strength of the Lira next week.

John Cameron

John studied economics at Cambridge University and later became an MSTA qualified Technical Analyst. He began working for TorFX almost a decade ago and now holds a Senior Account Manager position. As well as lending his clients support and guidance, John has produced market commentary and detailed exchange rate analysis for a number of online publications.

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