Pound to Turkish Lira (GBP/TRY) Exchange Rate News: Pound advances amid Lira selloff

Pound to Turkish Lira exchange rate chart

Ongoing social unrest and political volatility kept the Lira trading lower against the Pound even as the British currency broadly declined in response to surprising UK data.

The Lira also sank to fresh record lows against the US Dollar as yesterday’s impressive US manufacturing figures added to the case for the Federal Reserve continuing to taper stimulus.

The measure of manufacturing activity for the world’s largest economy showed the most rapid pace of expansion since May 2012 and a sharp increase in new orders.

This was later followed by the publication of the Federal Reserve’s Beige Book. The report indicated that the US probably continued to enjoy a moderate pace of expansion as 2013 drew to a close.

As today’s US initial jobless claims figures and manufacturing report are also expected to show improvement, adding to the case for tapering, emerging-market currencies like the Lira could weaken further during North American trading.

As Rabobank currency strategist Christian Lawrence notes; ‘It’s clearly a very broad-based move and none of the emerging market currencies are immune, but some are more vulnerable than others.’

Turkey’s shocking current account deficit data, published earlier this week, kept pressure on the Lira – as did concerns regarding the APK corruption scandal.

Turkish stocks and bonds have also been affected by the Lira sell-off.

The appeal of the Lira has been so damaged by the corruption probe that the currency remained locked in a bearish relationship with the Pound despite UK house prices falling in December.

Economists had expected a gauge of UK house prices to climb from 58 per cent to 60 per cent at the end of last year, but it actually dipped to 56 per cent.

The result prompted this response from foreign-exchange strategist Ian Stannard; ‘Positive momentum in UK data seems to be slowing.’

With influential economic data for Turkey thin on the ground over the next week additional Lira movement is likely to be triggered by political developments and US news.

Further signs that the Fed will trim quantitative easing when it meets at the end of January could push the Lira to new lows.