Dollar rises to 3.9 against lira amid concerns

Dollar rises to 3.9 against lira amid concerns

ISTANBUL
Dollar rises to 3.9 against lira amid concerns

The Turkish Lira slid against the U.S. dollar on Nov. 8 amid a number of concerns which put pressures on the Turkish currency, including ongoing strains in Turkish-U.S. ties.

The dollar rose to 3.9 against the lira in the noon of Nov. 8, making the lira the worst-hit emerging currency, although it eased slightly to 3.89 in the afternoon.

The dollar saw record high levels in January, hitting 3.94.

On Nov. 8, the euro also hit an all-time high against the lira, rising to 4.52.

The rise in both currencies also prompted a boost in gold, which hit 160.4 liras per gram.

The dollar/lira exchange rate declined to 3.82 at the beginning of the week following the resumption of visa applications on “a limited basis” between the U.S. and Turkey and a series of interventions by the Turkish Central Bank.

The markets now have eyes on a key meeting between Turkish Prime Minister Binali Yıldırım and U.S. Vice President Michael Pence in Washington, which has been postponed to Nov. 9.

Many problems between the two countries are expected to be discussed at the meeting.

“There are idiosyncratic stories - Turkey is definitely the story where investors should be most careful, but to some extent the recent depreciation shows the weakness has already mostly materialized,” said Sebastian Barbe, a strategist at Credit Agricole, on Nov. 8, as quoted by Reuters.

He added that much of the general weakness in emerging market forex was down to U.S. interest rate expectations, with two-year yields on Treasuries increasing and putting pressure on the more fragile emerging currencies such as the lira.

Turkey, United States, Dollar, lira