Greenback breaks new record against lira during holiday

ISTANBUL

Reuters Photo

The markets in Turkey are closed due to the ongoing Eid al-Adha holiday, but the U.S. dollar’s rise against the Turkish Lira continued for another day on Sept. 24, breaking a historic record at 3.0738 liras per dollar as the forex trade continued at the international markets.

The holiday in Turkey started Sept. 23 in the afternoon. 

The lira stood at 3.0398 to the dollar early in the morning on the international markets and even fell to 3.0275 liras before the historic record at 3.0738, above the latest record on Sept. 14, only hours before a speech by U.S. Fed chief Janet Yellen. 

The euro also rose to 3.4514 liras during the day, the highest in the past 10 days, before a slight loss. 

The dollar broadly strengthened Sept. 22 on expectations that a Federal Reserve interest rate hike remains on track in the next three months.

The greenback also gained as U.S. and European stock markets piled up losses on economic growth concerns and Volkswagen’s escalating emissions scandal.

“The widespread gains in the U.S. dollar confirm that rate hike expectations are a big driver of today’s move in currencies,” said Kathy Lien of BK Asset Management.

The euro fell to $1.1132 from $1.1195 on Sept. 21, but the dollar struggled against the Japanese currency, dropping to 120.14 yen from 120.54 yen.

The dollar had taken a hit after the Fed left unchanged its zero-level benchmark rate, but since then Fed officials have talked up a rate hike.  

Dennis Lockhart, head of the Atlanta Fed and a member of the policy-setting Federal Open Market Committee, on Sept. 21 insisted that a hike was still on the table for this year.

“After a round of hawkish remarks from Fed members since the weekend, many are giving the Central Bank the benefit of the doubt that rates could rise before the end of the year, buoying the dollar,” said Joe Manimbo of Western Union Business Solutions.

As for the euro, the single currency remained under pressure, a day ahead of testimony by European Central Bank chief Mario Draghi to the European Parliament.