Turkish Lira touches record low against US dollar
SINGAPORE/WASHINGTON - Reuters
The yen hit a 16-month high against the United States dollar on March 23, while the Turkish Lira skidded to a record low as rising global trade tensions triggered a bout of investor jitters.
The yen rose amid talk of position unwinding by Japanese retail investors, who had held long positions in higher-yielding currencies, such as the lira, against the Japanese currency.
“It’s mainly driven by cross/yen selling and stops from retail [investors] from what we can see,” said Tarek Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore.
Against the U.S. dollar, the lira fell to a record low of 4.0375 per dollar at one point.
The broad rise in the yen came as financial markets were rattled by worries over rising U.S.-China trade tensions.
The yen is often viewed as a safe haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan’s current account surplus.
Some US allies exempted from tariffs
U.S. President Donald Trump signed a presidential memorandum on March 23 that will target up to $60 billion of Chinese products with tariffs, but only after a 30-day consultation period that starts once a list of goods is published.
While his actions appeared to be more of a warning shot than the start of a full-blown trade war with Beijing, U.S. equities slumped as investors fretted about the potential impact on global trade.
China’s commerce ministry responded on Friday with news it was planning measures against up to $3 billion of U.S. imports to balance U.S. tariffs on Chinese steel and aluminum products.
Meanwhile, Trump has temporarily excluded six countries, including Canada and Mexico, and EU states from higher U.S. import duties on steel and aluminum.
In a presidential proclamation published late on March 22, Trump said he would suspend tariffs for Argentina, Australia, Brazil, South Korea, Canada, Mexico and the EU, the U.S.’s biggest trading partner, until May 1, as discussions continue.
After May 1, Trump would decide whether to permanently exempt the countries based on the status of talks, the White House said in a statement.
The U.S. was set to begin imposing the higher import duties of 25 percent on steel and 10 percent on aluminum, mainly aimed at curbing imports from China, as of March 23.
“I have determined that the necessary and appropriate means to address the threat to the national security posed by imports from steel articles from these countries is to continue these discussions and to exempt steel articles imports from these countries from the tariff, at least at this time,” according to Trump’s proclamation released by the White House.
Turkey is the eighth biggest steel producer in the world and its steel exports to the U.S. stood at $1.1 billion in 2017. Turkey is the sixth largest steel exporter to the U.S., taking a 5.6 percent share in the country’s total imports.