Pound Turkish Lira (GBP/TRY) Exchange Rate Rockets as Lira hit by Shock Volatility as Erdogan Cracks Down on Currency Speculators
Today has seen the Turkish Lira (TRY) plunge on currency markets following attempts by the Turkish authorities, under President Recep Erdogan, to crack down on those it deemed to be ‘currency manipulators’.
The moves came after US bank JP Morgan cut its price target for the Lira, prompting Turkey to enact measures to prevent speculators from ‘shorting’ the currency.
This, in turn, has caused a massive sell off of the currency, with GBP/TRY currently trading 2.60% lower on the day.
At present, the Pound (GBP) is trading at a rate of 7.2488 Lira on the inter-bank market.
Turkish Lira (TRY) Hit by Fears of Slowing Global Economic Growth
In addition to the volatility caused by the Turkish authorities cracking down on currency speculators, the Turkish Lira (TRY) has also been hit by a risk-off movement in global markets following a slump in Chinese industrial profits.
Industrial profits in China were revealed to have fallen by -14% in February, on an annualised basis, against expectations that they would remain positive.
This sudden weakening has sparked fears of there being a more serious global economic slowdown than had initially been expected, causing a surge in demand from safe haven currencies and an outflow form emerging market currencies such as the Turkish Lira.
Pound Turkish Lira (GBP/TRY) Exchange Rate Unaffected by Latest Brexit Anxiety
Meanwhile, the Pound (GBP) failed to fall against the Turkish Lira (TRY) this morning as Brexit-related anxiety affects Sterling in wider trade as MPs prepare to vote on a range of various Brexit options this evening.
After taking control of the House of Commons business earlier in the week, Parliament is set to hold a series of indicative (not legally binding) votes later this evening in an attempt to break the current Brexit deadlock.
The votes will see MPs indicate their preference for a range of potential solutions to the current Brexit impasse, including remaining in the EU customs union, holding a second referendum and even cancelling Brexit altogether.
Analysts are expecting the votes to drive further fluctuations in the Pound over the coming days, prompting GBP investors to remain cautious throughout today’s session.
GBP/TRY Outlook: Political Forces to drive Pairing in Coming Week
To a greater extent, the actions of the Turkish authorities will decided the value of the currency over the coming days.
Currently, any investor wanting to offload their portfolio of Turkish Lira (TRY) is unable to do so, to any great extent, so the true value of the currency is being held back.
Also driving the GBP/TRY exchange rate will be the ongoing development of risk sentiment as markets react to the latest raft of Chinese data.
At the same time, political developments in the UK’s Brexit process will also determine the value of Sterling (GBP) on the wider market, with little regard being paid to economic data releases for the next few days.