GBP/TRY Exchange Rate Edges Higher, Turkish-Syria Conflict in Focus
The Pound to Turkish Lira (GBP/TRY) exchange rate rose by 0.3% today, with the pairing currently trading around ₺7.865 in spite of rising Turkish industrial production, with December’s figure rising by 1.9%, while the year-on-year report showed an 8.6% increase.
Mustafa Varank, Turkish Industry and Technology Minister, commented:
‘We are working for a year in which growth is accelerating, the real sector is strengthening, and employment is on the rise. On an annual basis, all components of the index remained positive. The strong trend in the fields of capital goods, intermediate goods and high technology is an indication that we are on the right track for the future.’
However, the Turkish Lira (TRY) has come under strain after Turkish President Recep Tayyip Erdogan vowed to confront Syria by pushing forces loyal to Syrian President Assad from the north-west province of Idlib.
As a result, market appetite for the Turkish currency remains diminished on rising concerns that Turkey could face open confrontation with the Assad regime, which is support by Russia.
GBP/TRY Exchange Rate Rises as UK House Prices Beat Forecasts in January
The Pound (GBP) rose against the Turkish Lira (TRY) following today’s release of January’s UK RICS Housing Price Balance report, which soared above forecasts from the previous month’s 0% to 17%.
James McKillop, a partner at the estate agents Knight Frank, commented:
‘We’re seeing a bit of a champagne-cork reaction to Brexit and the election. What we cannot yet tell is how sustained the positive sentiment will be.’
The GBP/TRY exchange rate has performed well today, with Prime Minister Boris Johnson’s long-awaited post-Brexit cabinet reshuffle providing further clarity on how the UK will approach Brexit negotiations with the European Union.
However, we could see the Pound’s gains short-lived as the EU continues to take a tough stance on its negotiating position with the UK, with French President Emmanuel Macron pushing for the bloc to pursue a ‘level playing field’ UK-EU sustainability.
GBP/TRY Outlook: Could Hard Brexit Fears Begin to Weaken Sterling?
The Turkish Lira (TRY) will continue to be driven by political developments around Syria, with any further indications of escalation between the two nations weakening the TRY/GBP exchange rate as political uncertainty continues to wrack confidence in the Turkish currency.
Brexit will remain in focus for Sterling investors for the rest of the week. Any further signs that UK-EU trade relations could break down – or that the EU could take a harder stance in negotiations – would threaten a no-deal by the end of the year and weaken market appetite for the Pound.