Turkish lira hits 6-week high against US dollar

ANKARA – Anadolu Agency

REUTERS photo

The Turkish Lira appreciated against the U.S. dollar early on Feb. 23 amid hints from the Federal Reserve pointing to rate hikes as soon as March.       

The U.S. dollar/Turkish Lira rate dipped to as low as 3.5756 points, the lowest figure since Jan. 4, when the rate began its move toward its historic high of 3.9423 on Jan. 11.        

The lira advanced against the dollar despite Fed minutes showing “it might be appropriate to raise the federal funds rate again fairly soon” if labor market and inflation figures were “in line with or stronger than their current expectations.”

Analysts believe rising risk appetite in global markets plus monetary tightening by the Turkish Central Bank is supporting the lira against other currencies.     
   
“The Turkish Lira continued to strengthen on account of the ongoing tight monetary policy,” Deniz Çiçek from QNBFinansBank wrote in note to clients. 

 “USD/TRY trended down and touched below 3.60 in the afternoon [on Feb. 22], before ending the day at 3.6070. Following last night’s release of the FOMC minutes, TRY [Turkish Lira] gained as the dollar weakened globally,” the note said.      
   
In a different client note, Şeker Investment said the U.S. dollar retreated globally due to less-hawkish tone in Fed minutes than anticipated.        

“Global stocks retreated somewhat midweek; the USD also declined following the release of the U.S. Fed’s minutes of its Jan. 31 - Feb. 1 FOMC meeting, which included a less than recently imagined hawkish tone, thus providing almost no support to the possibility of an interest rate increase in  March,” it added.