Pound Sterling Turkish Lira (GBP/TRY) Exchange Rate Muted as Turkish Retail Sales Slump
The Pound Sterling Turkish Lira (GBP/TRY) exchange rate remained flat, leaving the pairing trading at around ₺8.6552.
The Turkish Lira remained under pressure after data revealed Turkish retail sales slumped for the third month in a row.
Coronavirus measures caused the country’s retail sales volumes to narrow by annual rate of 16.7% in May.
Added to this, further data revealed that May’s industrial production plummeted by -19.9%. This followed April’s upwardly revised reading of -31.3%.
However, The Lira was offered support as the data showed some signs of relief as production shrank less than expected in May.
Added to this, on a seasonally adjusted monthly basis, production increased by 17.4%. This was a significant recovery from the earlier plunge of -30.2% just a month before.
Brexit Trade Deal Worries Continue to Haunt the Pound (GB)
Meanwhile, Sterling remained under pressure despite making some gains against the US Dollar. GBP/USD rose towards a 200-day moving average of $1.27 which offered the Pound some support.
The British currency has benefitted from improved risk sentiment, which continues to offer the currency support. Added to this, Sterling was buoyed after the announcement of further fiscal stimulus from British Chancellor, Rishi Sunak.
This has meant GBP has been attracting more attention, allowing the currency to jump nearly 2% so far this month. This put the currency second to only the Norwegian Kone as the best performing currency in July as traders moved towards riskier assets.
According to Lee Hardman, currency analyst at MUFG:
‘The Pound remains strongly positively correlated with the performance of global equities.’
Hopes for a swift economic recovery has offered Sterling some support, but the upbeat sentiment also offered the riskier Turkish Lira support.
However, the pairing was left flat today as Britain’s departure from the EU continued to plague the currency.
The government is urging businesses and individuals to prepare for the end of the current transition period with a campaign called‘The UK’s new start: let’s get going.’
Markets were spooked after signs that many companies were not ready for the end of the transition period. A lobby group called the Institute of Directors noted that only a quarter of companies were completely ready for December 2020.
Pound Turkish Lira Outlook: Dire UK GDP to Send GBP Lower?
Looking ahead, the Pound (GBP) could slide against the Turkish Lira (TRY) following the release of UK GDP data.
If the latest growth data shows the British economy contracted more than expected in May, it will send GBP lower.
Sterling could extend these losses following the release of industrial, manufacturing, and construction data.
If May’s data continues to show activity in the sectors tumbled more than expected, it will leave investors cautious. This will send the Pound Turkish Lira (GBP/TRY) exchange rate lower.