By Greg Holden<\/p>\n
Last week\u2019s statement by Goldman Sachs that the Turkish lira (TRY) will come under selling pressure if the Turkish central bank doesn\u2019t hikes rates<\/a> has begun to see results. Advising its clients to hold long positions on the USD\/TRY, Goldman Sachs\u2019 strategy appears to be creeping across the forex world and the pair has indeed moved bullish since Friday.<\/p>\n The Central Bank of the Republic of Turkey is scheduled to meet this Thursday to discuss its monetary policy and bank regulations. Goldman doesn\u2019t expect the bank to hike its rates beyond their current 6.25%, nor to adjust capital requirements for its banks.<\/p>\n As a result, many are joining the chorus and recommending long positions against the lira as part of their short- and mid-term portfolio. Should the central bank raise rates, the TRY\u2019s strength may return. But for now a downturn is expected.<\/p>\n Turkey has always battled with what world it belongs to, the Middle East or Europe. With the growth prospects in Europe and the recent rate hike by the ECB, Turkey would need to follow suit to keep pace with its northerly neighbors. But the Middle East is in turmoil and the region\u2019s currencies are under significant pressure. To keep its goods competitive with its southerly neighbors a weakened currency will be required.<\/p>\n This Thursday\u2019s meeting will be a clash between those who view Turkey a part of Europe and those who view it as a part of the Middle East. With Turkish Prime Minister Recep Tayyip Erdogan leaning towards its Arab neighbors to the south, a Turkish policy in favor of holding rates steady and weakening its currency may be expected, thus depreciating the TRY over the next several weeks.<\/p>\n Forex Market Analysis provided by ForexYard. <\/a><\/strong><\/em><\/span> \u00a9 2006 by FxYard Ltd<\/p>\n Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":" Last week\u2019s statement by Goldman Sachs that the Turkish lira (TRY) will come under selling pressure if the Turkish central bank doesn\u2019t hikes rates has begun to see results. Advising its clients to hold long positions on the USD\/TRY…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-20815","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=20815"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/20815\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=20815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=20815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=20815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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