The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate rallied by around 0.84% on Monday afternoon, nearing a fresh monthly-high.
After Turkey entered Syria for the first time since the start of the uprising nearly four years ago, the Lira slumped versus most of its major rivals. Mixed economic data had minimal impact with focus firmly set on mounting geopolitical tensions.
The Pound, meanwhile, strengthened versus the majority of its most traded competitors despite disappointing retail sales data. The gains can be attributed to expectations that the Bank of England (BoE) will increase the cash rate before most traders predicted.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate is currently trending in the region of 3.8171.
Pound Sterling (GBP) Exchange Rate Gains on Rate Hawk Support
After a succession of positive domestic data results, the Pound rallied as futures traders cut bets as to the timing of a BoE rate revision. With economic divergence widening, the UK is set firmly on the side of growth which has seen additional support. Such is the strength of speculation that rates will soon be upwardly revised; Monday’s very disappointing data had no impact.
CBI Reported Sales came in at a meagre 1 in February, far below the median market forecast of 35 and the previous figure of 39. ‘There is no getting away from the fact that CBI’s distributive trades survey for February is substantially weaker than expected. Even so, we suspect it is primarily a case of consumers taking a breather after spending at a robust rate through the fourth quarter,’ stated Howard Archer, chief UK economist at IHS Global Insight.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate has fallen to a low of 3.7608 today.
Turkish Lira (TRY) Exchange Rate Dives as Geopolitical Tensions Mount
Turkish troops entered Syria for the first time in four years in order to repatriate 38 Turkish soldiers protecting the tomb of Suleyman Shah, the grandfather of the founder of the Ottoman Empire.
‘With its soldiers out of harm’s way Turkey will have a freer hand to take part in the coalition, if it so chooses,’ says Ozgur Unluhisarcikli, of the German Marshall Fund of the United States.
These political unknowns and potential repercussions from Syria caused the Lira to slump versus nearly all of its most traded counterparts. Mixed domestic data had minimal impact. Business Confidence ticked higher from 103.2 to 103.4, but Capacity Utilisation dropped from 73.7% to 72.8%.
Pound Sterling to Turkish Lira (GBP/TRY) Exchange Rate Forecast to Hold Gains
Given the lack of data to curb the trend, and with the British asset surging irrespectively of domestic data, the Pound Sterling to Turkish Lira (GBP/TRY) exchange rate is likely to hold gains for the remainder of Monday’s trade.
There is a higher likelihood of Lira volatility on Tuesday, however, with the Central Bank of the Republic of Turkey due to make their interest rate decision. A complete absence of British data may cause the Pound to soften as traders lock in profits with the recent surge offering attractive selling positions.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate advanced to a high of 3.8200.
