The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate rallied by around 1.5% on Thursday afternoon.
The British asset dived versus its currency rivals during Wednesday’s European session after domestic labour market data produced mostly negative results. Of particular disappointment was the second consecutive month of rising unemployment, although the headline percentage was unmoved.
Thursday’s European session, however, saw the Pound recover losses and rack up fresh gains. The initial uptrend can be linked to fears that Wednesday’s depreciation was overdone given the backdrop of improving factory output and accelerated wage growth. Also aiding the Pound’s appreciation on Thursday was a positive result from the solitary British economic data publication. The RICS House Price Balance bettered July’s median market forecast 42%; with the actual result reaching 44%. Many industry experts are concerned that the rapid rise in house prices will alienate first time buyers and price many out of the market.
‘A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenges being presented by the housing market,’ RICS chief economist Simon Rubinsohn said.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate is currently trending in the region of 4.3973.
Thursday has seen the Turkish Lira decline across the board after talks between Turkish Prime Minister Ahmet Davutoglu and opposition leader Kemal Kilicdaroglu broke down. Davutoglu was attempting to form a coalition with the secular party but talks lasted less than two hours with both parties stating that the leaders could not find any common ground. Elections will likely be called again soon given that the ruling party requires a coalition to maintain power.
‘A coalition is possible but the more likely scenario is that negotiations will drag on and both parties will drop the ball in Erdogan’s court on August 24 and put the blame on him for going ahead with early elections,’ said Atilla Yesilada, a political analyst with Global Source Partners, a consultancy. ‘At the end of the day, I don’t see a deal that satisfies both parties.’
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate was trending within the range of 4.3282 to 4.4111 during Thursday’s European session.