Turkish Lira Slides On Trade War Unease, Hit By ‘Flash Crash’

www.oann.com | 8/2/2018 | Staff
my_new_puppy (Posted by) Level 3
ISTANBUL/ANKARA (Reuters) – The Turkish lira weakened more than 1% against the dollar on Monday, after briefly tumbling to 6.47 overnight in what market watchers described as a “flash crash” as Japanese investors cut risk assets over Sino-U.S. trade war worries.

The lira stood at 5.8160 against the dollar at 0628 GMT, weakening from a close of 5.7540 on Friday. After a currency crisis wiped nearly 30% off the lira’s value in 2018, it has fallen 9% this year.

Trade - War - Days - EM - FX

The China-U.S. trade war, which intensified in recent days, “means that EM FX will continue to weaken for the foreseeable future. In the absence of a thawing in trade frictions it remains a market to be structurally short EM and buy dollars on any dip,” currency analysts at Societe Generale said in a note.

On Friday, U.S. President Donald Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods.

Friction - Shares - Monday - Confidence - World

The latest friction, which sunk Asian shares Monday, has shaken confidence in the world economy and sent investors steaming to the safe harbors of sovereign bonds and gold, hitting emerging markets (EMs) like Turkey.

The brief plunge in thin overnight yen/lira trading was reminiscent of another “flash crash” on Jan. 3, when Turkey’s currency weakened to a similar level due to a global market sell-off and flight from risk triggered by concerns...
(Excerpt) Read more at: www.oann.com
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