Pound Turkish Lira (GBP/TRY) Exchange Rate Rises as US-Imposed Sanctions Weigh on Turkish Economy

July 22, 2019 - Written by John Cameron

STORY LINK Pound Turkish Lira (GBP/TRY) Exchange Rate Rises as US-Imposed Sanctions Weigh on Turkish Economy

GBP/TRY Exchange Rate Edges Higher as Turkey Hits Back on US Sanctions Threat

The Pound Turkish Lira (GBP/TRY) exchange rate rose by 0.3% today, leaving the pairing fluctuating around ₺7.097.

The Turkish Lira (TRY) has recovered from some of its losses against the Pound (GBP) following Turkish President Erdogan’s firing of the Central Bank of Turkey’s (CBRT) Governor Murat Çetinkaya earlier this month.

However, today saw TRY suffer due to returning concerns over the possibility of US-imposed sanctions.

Turkish Foreign Minister Mevlut Cavusoglu hit back, and further exacerbating tensions, by saying:

‘If the United States portrays an adversarial attitude towards us, we will take retaliatory measures, as we’ve told them. This is not a threat or a bluff. We are not a country that will bow down to those who show an animosity towards Turkey.’

GBP/TRY Exchange Rate Improves despite Heightened Brexit Uncertainty

The Pound, meanwhile, has fallen against many of its other competitors as Brexit uncertainty has increased ahead of tomorrow’s announcement of the next leader of the Conservative Party and new Prime Minister.

As Boris Johnson, a known Brexiter, is perceived as the most likely to replace Prime Minister Theresa May on Thursday, this has left many Sterling traders feeling increasingly jittery.

The UK’s exit from the European Union on 31 October is now more likely to be disorderly, with Mr Johnson previously stating his support of a possible no-deal between the UK and the EU.

Philip Hammond, the Chancellor of the Exchequer, has also forwarded his resignation ahead of Mr Johnson’s likely stepping up as the next PM.

Mr Hammond, when asked about his possible sacking from Johnson’s cabinet, responded:

‘No, I’m sure I’m not going to be sacked because I’m going to resign before we get to that point. Assuming that Boris Johnson becomes the next prime minister, I understand that his conditions for serving in his government would include accepting a no-deal exit on 31 October and that’s not something that I could ever sign up to.’

GBP/TRY Outlook: Sterling to Fluctuate Ahead of New PM Announcement

Sterling traders will be looking ahead to the Bank of England’s Financial Policy Committee minutes tomorrow.

Any indications of a struggling UK economy, or of heightened Brexit dangers, would likely prove a drag on the Pound.

Tomorrow will also see Andrew Haldane, the Bank of England’s Chief Economist, deliver a speech

TRY investors, meanwhile, will be awaiting tomorrow’s Turkish consumer confidence figures for June.

The GBP/TRY exchange rate, however, will remain sensitive to developments surrounding the announcement of the next Prime Minister.

Sterling is likely to fluctuate wildly this week ahead of Thursday’s announcement.

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TAGS: Pound Sterling Forecasts Turkish Lira Forecasts