Dollar below 2.10 against Turkish lira after 3.5 months
CİHAN PhotoThe dollar has fallen below the 2.10 threshold against the Turkish Lira for the first time since Dec. 26, 2013 amid a bounce of the emerging markets and a slightly neutralized mood in domestic politics.
After retreating down to 2.0989 in the morning, the dollar/lira ratio leveled to approximately 2.2014 as of 10:06 a.m.
The lira has been weak since the Fed’s tapering plan announcement that came in May, but the real blow to the currency came with the political turmoil that began with the Dec. 17, 2013 graft investigation.
Leaving the March 30 local elections that confirmed the persistence of public support for the ruling Justice and Development Party (AKP) has relieved investors, who were worried about the course of “political stability” in the country.
Following an exodus of investors during most of the first quarter, emerging stocks are on track for a third consecutive week of gains.
However, current gains on emerging markets appear fragile and remain modest compared with the earlier losses.
In the last few years, investors poured into emerging markets in search of better returns after the Federal Reserve drove down U.S. debt yields to stimulate the domestic economy. However, the Fed is expected to scrap its main tool in this policy, buying bonds, and raise official interest rates in 2015, attracting investors back to U.S. markets.