Does the currency crisis in Turkey spreading?
Dear traders,
On Friday, the Turkish lira rate for a short time dropped more than 20% to the historical minimum against the dollar, which led to instability in the financial markets of the world. Investors fear that the collapse of the Turkish currency rate could spread to the emerging markets and strike a blow to the banking system of Europe.
On Friday, the lira exchange rate fell by about 15% against the dollar, which was the biggest drop since the financial crisis in Turkey in 2001. The Turkish currency has fallen in price due to the deepening conflict between Turkey and the United States.
This week, the US imposed sanctions against Turkey for the arrest of the Protestant pastor, US citizen Andrew Brunson, who was charged with terrorism for taking part in the unsuccessful coup d’état of 2016. On Friday, US President Donald Trump announced that he would double duty on Turkish steel and aluminum.
During the speech on Friday, Turkish President Recep Tayyip Erdogan could not offer any economic solution to the problem. According to him: “They have their dollar, and we have our God.”
Erdogan also asked citizens to change the euro, dollars and gold, which they hide under the pillows, into the Turkish lira. He called the current situation a domestic battle.
Fears about the situation in the markets of developing countries intensified after the ruble against the dollar fell to a minimum since April 2016. The fall of the ruble was due to the introduction of new US sanctions against the Kremlin due to accusations of poisoning the former Russian spy Sergei Skrypal using a chemical poison “Novichk” in the provincial English town of Salisberry.
Also, fears remain about the geopolitical situation as a whole because of the beginning of the US and China trade war. Last week, the governments of the two countries made statements about imposing additional duties on each other’s goods for $ 16 billion (Investing.com)
Consider these events while planning your trading day!
Have a good trade, Ladies and Gentlemen!
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