Lira trades at fresh record low against USD

Tuesday, August 18, 2015

An indiscriminate emerging market currency rout pushed the Turkish lira to a fresh record low yesterday as investors reacted to the news that PM Ahmet Davutoglu announced his party’s failure to form a coalition government. The expectation of fresh elections saw the lira trade 1.3% lower against the dollar towards 2.8685 as the AK Party failed to reach any terms with the opposition. Having lost almost 24% against the dollar since the start of the year the lira has been one of the emerging markets worst performing currencies and any protracted weakness could see the lira trade towards 3.000 against the dollar as momentum against the lira builds.

Emerging currencies extended losses with the rouble leading the charge, trading back above 65.000 against the dollar for the first time since early February as the Russian economy continues to feel the effects of lower crude oil prices. Activity this morning has seen the rouble extend its sell-off against the USD, trading towards 65.9000 early on bringing total losses for the month so far to 8% while negative sentiment building up since the beginning of June has seen the rouble lose over 26% against the greenback.

The Thai baht extended losses back towards levels last seen during the financial crisis in 2009 as the currency took a fresh hit after the bomb blast in Bangkok yesterday. Having faced significant pressure since the start of the year from a strengthening US economic outlook, which has seen the dollar post substantial gains against emerging market currencies as investors position themselves for a US rates rise, the baht saw heavy outflows yesterday pushing the currency back above 35.500 against the dollar. Year-to-date the baht has lost 8.5% against the dollar with volatility particularly spiking during the second half of the year. 5.4% of those losses against the greenback have been accrued since the start of July and yesterday’s blast could dent sentiment further. Activity early this morning has seen the baht trade towards 35.600 against the dollar early on with near term targets of 35.725 and 35.855 now in sight.

TRY trades at fresh record low against USD

TRY Curncy Turkish Lira Spot 2015 08 18 08 46 44

RUB extends losses as crude oil rout continues

RUB Curncy Russian Ruble SPOT 2015 08 18 08 25 37

THB sells-off as Bangkok blast spooks investors

THB Curncy Thai Baht Spot Dai 2015 08 18 08 37 49

Events for today

0930

UK

Jul

CPI & PPI

1330

US

Jul

Housing starts

1330

US

Jul

Building Permits

Topics: USD, RUB, TRY, THB
More from: Kash Kamal