Lira, Euro And Canadian Dollar Fall, US Dollar Strengthens

Published: 20 Dec at 3 PM Tags: Euro, Dollar, America, Eurozone, Canadian Dollar, USA, Canada, Turkey,

As a volatile week draws to a close the Lira was struggling to regain losses after falling to a record low in response to high-profile corruption concerns.

The Lira plunged against all of its major peers and hit a record low of 2.0970 after shedding 1.2 per cent.

After 14 members of the Turkish government were dismissed in the ongoing corruption saga the Lira was left in a precarious position.

As one well-placed industry expert noted; ‘Political risk has increased considerably. It took a few days for foreign investors to digest what has happened. This selloff could continue for as long as 10 days.’

Furthermore, it is believed by some that the Lira could tumble to 2.1037 against the US Dollar before the close of 2013.

This could prove to be of particular concern for the Turkish central bank, for as Tugberk Citilci of Sanko Securities observes; ‘The central bank’s real concern is the pass-through effect to inflation. The currency’s weakening comes in addition to the central bank missing its target of 5 per cent inflation this year. It will be a tough start to the new year for the bank’.

The Lira is currently trading against the US Dollar in the region of 2.0876

During North American trading the Lira extended losses against the US Dollar as growth data for the world’s largest economy came in above estimates.

In the US, annualised GDP came in at 4.1 per cent in the third quarter rather than the 3.6 per cent forecast.

The result supports the Federal Reserve’s decision to taper stimulus and pushed the ‘Greenback’ higher against its peers.

In other currency news, the Euro was struggling today as Standard & Poor’s cut the European Union’s top level credit rating from AAA to AA+ with a stable outlook and the Canadian Dollar extended declines following a disappointing domestic inflation report.

Canada’s consumer price index rose 0.9 per cent in November year-on-year rather than the 1.0 per cent forecast. The figure remains well below the Bank of Canada’s target and adds to the case for the financial institution holding interest rates lower for longer.
As of Friday, 20th December 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1945, GBP USD exchange rate was 1.6332, and GBP CAD exchange rate was 1.7372.

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