Mar 23 2018

Lira slumped after stop-losses on yen trades - report

A selloff in the Turkish lira in early trade in Asia was probably caused by stop-loss orders from Japanese retail investors trading the lira for the yen, Bloomberg reported citing Koji Fukaya, chief executive officer at FPG Securities in Tokyo.

The lira recovered from lows below 4.03 per dollar to trade at about 3.96 at 11 a.m. in Istanbul, down about 0.7 percent.

William Jackson, an emerging markets economist at Capital Economics in London, said the Turkish central bank was unlikely to tighten monetary policy at levels of 4 per dollar. The currency would probably need to weaken to 4.25, equating to currency depreciation of 10 percent over a three month period, before it acts, he said.