Pound Sterling Turkish Lira Exchange Rate News: GBP/TRY Strikes Two-Month Low as US Tensions Thaw

Turkish Lira (TRY) Exchange Rates Firm as Turkey-US Tensions Thaw

The Turkish Lira continues to push higher against the Pound (GBP/TRY) this week as the embattled currency slowly begins to rebuild investor support.

This comes following Turkey’s release of US Pastor Andrew Brunson last week, which has prompted a rapid cooling of tensions between the US and Turkey.

US President Donald Trump hailed Brunson’s release as ‘a tremendous step forward’ in improving relations between the two countries as he met with the US pastor on Saturday.

While the prospect of an improved relationship with the US has provided the Lira with a much needed boost this week, analysts warn that there are still some significant long-term challenges facing the currency.

Economists are particularly wary of soaring domestic inflation and questions over Turkey’s central bank independence – issues that will both need to be resolved if the Lira is to claw back some of this year’s losses.

GBP/TRY Exchange Rate Slides as UK Inflation Slows

The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate is falling back this morning as markets react to the UK’s latest Consumer Price Index (CPI).

At the time of writing the GBP/TRY exchange rate has fallen around 0.3% from its opening levels, leaving the pairing at a two-month low.

The Pound is on the defensive, not because of Brexit this time, but due to a lacklustre CPI reading from the UK.

According to data published by the Office for National Statistics (ONS), UK inflation eased to 2.4% in September, down from 2.7% the previous month and coming in below expectations of a more modest slide to 2.6%.

While the drop in inflation bodes well for UK consumers, it came as a disappointment to many GBP investors as it will relieve pressure on the Bank of England (BoE) to continue tightening monetary policy, potentially leading to the bank delaying its next rate hike until late 2019.

GBP/TRY Exchange Rate Forecast: All Eyes on Sterling as EU Summit Gets Underway

Looking ahead, the Pound Turkish Lira (GBP/TRY) exchange rate could face some volatility as markets brace for the start of the latest EU summit of leaders where Brexit is likely to dominate the conversation.

However with the UK and EU still in a deadlock over the issue of the Irish border, expectations going into the meeting are low, with investors likely to shun Sterling for the duration of the meeting unless there are any positive developments.

Outside of Brexit the Pound may also be impacted by the release of the UK’s latest retail sales figures, with GBP exchange rates likely to come under pressure if sales growth is shown to have contracted as expected in September.

Meanwhile the Lira may continue to appreciate over the next couple of days as US Secretary of State, Mike Pompeo’s visit to Turkey as part of a joint investigation into the disappearance of Saudi Arabian journalist Jamal Khashoggi signals a further easing of tensions between Washington and Ankara.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail

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