GBP/TRY Exchange Rate Eases, Brexit Uncertainty Returns as UK Markets Await EU Extension Announcement
The Pound Turkish Lira (GBP/TRY) exchange rate eased today, with the pairing currently trading around ₺7.456 after Prime Minister Boris Johnson’s ‘programme motion’ to fast-track his Brexit deal by October 31 was rejected by MPs in last night’s parliamentary vote.
Mr Johnson told MPs:
‘We now face further uncertainty, and the EU must now make up their minds over how to respond to parliament’s request for a delay … One way or another, we will leave the EU with this deal.’
The GBP/TRY exchange rate failed to gain due to the UK-EU Brexit deal now being in a state of limbo as EU leaders must now ratify an extension period for the UK’s departure.
However, news that the Labour Party could back a general election before Christmas has left UK markets feeling jittery on increasing political uncertainty.
Richard Burgon, a Labour MP for East Leeds, commented:
‘I’d like to see an election before Christmas. I want to get Boris Johnson and his Thatcherite mates out of Downing Street as soon as possible. So as soon as the EU has agreed that extension, so that Boris Johnson cannot push us through a no-deal without a mandate to do so, then we want a general election.’
TRY/GBP Exchange Rate Edges Higher, Turkish Consumer Confidence Improves in October
The Turkish Lira (TRY) rose against the Pound (GBP) following today’s release of October’s Turkish consumer confidence figure, which beat forecasts and rose from 55.8 to 57. As a result, this propped up market confidence in the Turkish currency with the index showing increasing optimism in the Turkish economy.
The TRY/GBP exchange rate has also benefited from Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin’s deal for keeping Kurdish forces away from Syria’s border with Turkey.
Mr Erdogan announced it as a “historic agreement”, saying that according to “this agreement, Turkey and Russia will not allow any separatist agenda on Syrian territory.”
The Turkish currency has also benefited from leading US Senators agreeing to withhold sanctions on Turkey to allow diplomatic efforts a chance to develop.
US Republican Senator Lindsey Graham commented:
‘The president will relieve sanctions if they do what they promised to do. If they don’t, the president will go back after Turkey and we will go back after Turkey. So, I will pause, give negotiations a chance.’
GBP/TRY Outlook: Could Sterling Rise on Ratified EU Brexit Extension?
Turkish Lira traders will be looking ahead to tomorrow’s interest rate decision from the Central Bank of the Republic of Turkey, which is expected to ease from 16.5% to 15.5%. Consequently, we could see the TRY/GBP exchange rate begin to ease on heightening fears over the Turkish economy.
Brexit developments will remain firmly in the driving seat for the GBP/TRY exchange rate. Any indications that the EU could grant a long extension would, however, prove positive for the Pound as this would diminish the likelihood of an imminent no-deal.