ONLINE FOREX BROKER
2021-04-26 • Updated
How much unexpected news the Turkish lira can handle? Just two months have passed after Turkish President Tayyip Erdogan fired the central bank’s governor and replaced him with Sahab Kavcioglu, who was expected to conduct a policy of low-interest rates. That is, the president created conditions for extremely high inflation and lower economic growth. However, the challenges for the Turkish lira were not over. On Monday, April 26, the Turkish lira plunged on the straightforward comments of US President Joe Biden. So, what exactly happened?
On April 25, the US President commemorated the mass killing of Armenians in the Ottoman Empire and called it a “genocide”. This refers to the events that happened at the beginning of the XX century. Turkey has denied that its predecessors in the Ottoman Empire were connected with acts of brutality against the Armenian people. The reaction from the Turkish side came right away. According to the Turkish foreign ministry, the USA has made a “grave mistake” that affects the mutual trust and friendship ties between the two countries. The news resulted in swings of the Turkish lira, as USD/TRY has spiked above the highs of March 22.
It’s worth mentioning that the Turkish assets are highly sensitive to the escalation of relations between the USA and Turkey given past US sanctions and economic threats.
The dovish policy by the Turkish central bank is another factor that affects the TRY negatively. According to analysts, the regulator will begin cutting rates in the middle of the year. They also suggest that the new governor may re-impose the expensive policy of selling foreign currency reserves to support the lira.
The USD spiked against the Turkish lira at the early hours of the European trading session. Still, sellers could control the momentum and hold the pair below the ascending trendline. We may expect bulls to try regaining their strength and pushing the pair towards 8.5. After that, reaching 8.5500 will be highly likely. On the downside, the support levels lie at 8.25 and 8.14.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
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