{"id":133656,"date":"2018-09-13T17:15:15","date_gmt":"2018-09-13T21:15:15","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=133656"},"modified":"2018-09-13T16:54:18","modified_gmt":"2018-09-13T20:54:18","slug":"lira-soars-on-cbrt-rate-hike-pound-jumps","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/09\/lira-soars-on-cbrt-rate-hike-pound-jumps\/","title":{"rendered":"Lira soars on CBRT rate hike, Pound jumps"},"content":{"rendered":"
September 13, 2018<\/div>
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Article by ForexTime<\/a><\/p>\n

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The Lira roared back to life on Thursday after Turkey\u2019s central bank caught investors off-guard by raising interest rates higher than market expectations.<\/p>\n

In a move that was seen as defiance against President Recep Tayyip Erdo\u011fan, the Central Bank of the Republic of Turkey (CBRT) raised its key interest rate sharply from 17.75% to 24%. While the Lira has scope to extend gains on the CBRT\u2019s pledge to enact strong monetary tightening, bulls could face headwinds down the road.<\/p>\n

A one-time defiance against Erdo\u011fan may not be enough to fully convince markets that Turkey\u2019s central bank is truly independent. Investors need to see \u201cfurther monetary tightening\u201d over a period of time for further reassurance. Market players will keep a close eye on how President Erdo\u011fan reacts to today\u2019s interest rate hike. Any attempts on his side to influence monetary policy is likely to weigh heavily on sentiment.<\/p>\n

Turkey\u2019s interest rate hike not only boosted the Lira but also supported other emerging market currencies. A softer US Dollar complimented\u00a0the upside with the South African Rand gaining 1.2% while Russia\u2019s Rouble rose 1%. Emerging market currencies could be offered some breathing room if trade tensions continue to ease and the Dollar weakens further.<\/p>\n

Elsewhere, the Bank of England voted unanimously to keep interest rates unchanged at 0.75%. Policy makers saw \u201cgreater Brexit uncertainty since August\u201d with rate hikes \u201cgradual and limited\u201d over the coming years. The Pound\u2019s reaction towards the rate decision and BoE policy statement was fairly muted. However, the currency later jumped on reports that Britain and the European Union had made progress on the Irish border puzzle. It is becoming very clear that the Pound remains highly sensitive to Brexit developments and this continues to be reflected in the currency\u2019s explosive price action. The technical picture suggests that bulls are bulls are back in town on the daily charts. A daily close above 1.3100 may pave a path towards 1.3160.<\/p>\n

In Frankfurt, the European Central Bank kept policy unchanged and confirmed it would halve its monthly bond purchases to 15 billion euros from October. The central bank trimmed its growth forecast and raised concerns over protectionisms and emerging market unrest. However, Mario Draghi expressed confidence over the health of the eurozone which boosted the Euro. The Euro rallied a two-week high following Draghi\u2019s press conference with prices trading marginally above 1.1680 as of writing. A solid daily close above 1.1650 could inspire a move higher towards 1.1710.<\/p>\n

It was a painful day for the US Dollar after a surprise fall in US inflation dented expectations for a rate hike in December. The renewed risk sentiment accelerated the Dollar\u2019s downside with prices dipping below 94.50. Investors may be offered another opportunity to offload the Dollar if Friday\u2019s US retail sales report prints below market forecasts. The Dollar Index remains at risk of sinking towards 93.90 if bears secure a weekly close below 94.50.<\/p>\n

Oil prices tumbled sharply after reports from the International Energy Agency (IEA) showed global oil supply hitting a record high of 100 million barrels a day last month. The record world output could neutralize the negative impacts created from US sanctions against Iran\u2019s oil exports. WTI Crude has scope to challenge $68.10 in the near term if prices can keep below $69.00.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The Lira roared back to life on Thursday after Turkey\u2019s central bank caught investors off-guard by raising interest rates higher than market expectations. In a move that was seen as defiance against President Recep Tayyip Erdo\u011fan, the Central Bank of the Republic of Turkey (CBRT) raised its key interest rate sharply from […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-133656","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/133656","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=133656"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/133656\/revisions"}],"predecessor-version":[{"id":133664,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/133656\/revisions\/133664"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=133656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=133656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=133656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}