Lira getting Stronger - Why?

[Colwyn]

Ah yes, I should have remembered CBF Rule #1: Sooner or later all threads must include discussion of the price of Efes.

[JohnF]

Well the new Governor has announced a 0.5% cut in interest rates. Since this is what the majority of market analysts had been predicting the announcement appears to have been greeted with approval and the lira has strengthened from 2.83 to 2.81 against the dollar. Not a huge jump but it will please Governor Murat Cetinkaya.

Didn't last long.  Weakened gradually over the week and sitting at 2.85 just now - similar story with sterling, strengthened to 4.03 but now slid back to 4.12.

I'm wondering if this has more to do with little reginalds bullish behaviour towards the EU and the "demand" for entry into Schengen.  Its been noticable in the past that when he's prominent in the news (for the wrong reasons) the lira takes a hit.

JF

[JohnF]

...and sure enough, the uncertainty over the relationship between little reginald and Davutoğlu seems to have given the market serious jitters.  Rumours are suggesting that Davutoğlu may resign due to the erosion of his powers and a worsening relationship with the Prez.  Even against a weakening pound, the lira is sitting at 4.15 and at 2.87 to the USD.

JF

[JohnF]

Not seen the lira bomb like this for a while, now down to 4.18 and 2.89.

JF

[Colwyn]

Any news about this afternoon's meeting? It is certainly being talked up in the media - RTE to let Davutoglu run country or he will resign versus Davutoglu to back new Presidential constitution or RTE calls AKP conference to replace him. I wonder if any chance of a disaffected wing of the AKP breaking away and withdrawing parliamentary support.

[kevin3]

  Theres an article in the HDN warning that bad loans and bankruptcies are sounding the alarm bells for Turkey's fragile economy.

[JohnF]

Any news about this afternoon's meeting?

Its over but no statement so far.  Now down to 4.20.

JF

[Colwyn]

My live currency feed is jumping all over the place in the last ten minutes. Dollar has been up to 2,97 and - for the lasy few seconds - back to 2.95. That's a drop for lira of about 3.5% today. Even the GBP is up over 3% at around 3.27.

[Colwyn]

Davutoglu gone?

Reuters are reporting that the AKP will hold an emergency congress in the next few weeks to select a new leader and that Davutoglu will not be running

[kevin3]

  Davutoglu is to hold a  "Crucial " press meeting tomorrow, the 5th.