Jun 14 2019

Turkey’s lira may weaken beyond 6 per dollar on politics – report

Turkey’s lira may slide beyond 6 per dollar because of political tensions with the United States over the country’s purchase of Russian missiles and a rerun of an election for Istanbul mayor, FX Street said.

The decline in the lira faces resistance at 5.9326 per dollar, a two-week low reached earlier on Friday, and at 5.9893 per dollar, a technical level based on retracements from a recent rally, the currency news and analysis website reported. Should the lira pass through a psychological level at 6 per dollar, the next point of resistance is at 6.1516, it said.

The lira added to losses on Friday after Foreign Minister Mevlut Çavuşoğlu said the government will retaliate should the United States impose economic sanctions on the country for its plans to buy the S-400 air defence missiles, slated for delivery in July. The government is already assessing what form such a move would take, Bloomberg reported citing unidentified officials.

The purchase is irreversible and a symbol of Turkey’s new-found global independence, Çavuşoğlu said, reiterating a view expressed by the interior minister earlier this week.

The lira was down 0.5 percent at 5.89 per dollar at 2:43 p.m. local time in Istanbul. Losses this year total about 10 percent. The currency fell 28 percent against the dollar in 2018.

Investors are also eyeing tensions between the governing party and the opposition over the Istanbul election on June 23. The result of an initial vote on March 31 was cancelled after the ruling Justice and Development Party (AKP) said irregularities helped the opposition to a narrow win.