The Turkish Lira is in Recovery Mode
Turkey’s Lira finally recovered as the country’s central bank moved to ease pressure on the currency, triggering a 7% surge to 6.4 per USD TRYTOM=D3.
The Lira lost almost 10% Monday alone and has lost more than 40% of its value so far in Y 2018 as the country struggled economicly
“These things get very volatile in both directions once you have had a really big move,” Saxo bank’s head of FX strategy said. “To suggest this thing is over, you would have to see that Turkey is isolated. I am not there yet and I do not think the market is there.”
European shares also bounced back after 2 days of selling as anxieties over contagion from the Turkish currency crisis eased.
After falling to a 21-month low Monday, eEurozone bank stocks .SX7E rose 0.8% Vs a 0.4% gainer by the pan-European STOXX 600 cross-sector benchmark [.EU].
Data showed the region’s largest economy, Germany, picked up more steam than expected in Q-2, although the bounce might have been stronger had surveys from China not proved softer than expected.
Chinese retail sales, industrial output and urban investment all grew by less than forecast in July, 3 disappointments that underlined the need for more policy stimulus in China even as trade risks intensify.
The Shanghai blue-chip index .CSI300 was off 0.9% and weighing on MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS, which eased 0.25%.
Moves elsewhere were mixed.
Japan’s Nikkei .N225 rose 2.3% and Australian stocks added 0.8%.
Investors are encouraged that US declines were only minor overnight after the losses by the Lira and other emerging-market currencies.
The DIA ended Monday down 0.5%, the S&P 500 lost 0.4% and the NAS Comp fell 0.25% on the day. At this writing the US major stock market futures are tracking higher.
In commodity markets
Gold slid to its lowest since late January 2017. It was at 1,1195 oz XAU=. And US government data last week showed that Gold speculators had lifted their Bearish bets to a record.
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