Wall Street dragged down by fall out from Turkey's currency crisis

Wall Street dragged down by fall out from Turkey's currency crisis

Wall Street dragged down by fall out from Turkey's currency crisis

Visitors to Turkey flocked to its high-end shops to snap up bargains today, their purchasing power buoyed by a currency crisis as the country's lira sank to a record low beyond 7 per dollar.

"There are economic terrorists on social media", Erdogan told a gathering of Turkish ambassadors at the presidential palace in Ankara, adding that the judiciary and financial authorities were taking action in response.

"We will impose a boycott on USA electronic products". "If they have iPhone, the other side has Samsung".

Even with the rebound, the lira has plunged 25 percent this month as tension with the US over a jailed American pastor deepened and Erdogan ruled out higher rates and an global bailout.

ANALYST'S VIEWPOINT: "While we are nowhere near the elimination of concerns over Turkey, the improvement in sentiment from the initial reactions have helped USA markets higher overnight, setting a more benign tone for the region this morning", Jingyi Pan of IG said in a commentary. Macy's rose 3 per cent.

In 2014, one US dollar would buy two Turkish liras.

Although the lira enjoyed a small respite on Tuesday, investors say measures taken by the Central Bank on Monday to ensure liquidity fail to address the root cause of lira weakness. But they said the USA tariff hike on Turkish steel at a time of "considerable stress" tells emerging economies not to expect Washington's help to calm their markets. The lira rebounded as much as 7 percent as Turkish stocks and bonds rallied.

Turkey is grappling with a currency crisis sparked by concerns over President Recep Tayyip Erdogan's economic policies and a trade and diplomatic dispute with the United States.

Foreign Minister Mevlut Cavusoglu said Monday that the United States would not achieve aims by exerting pressure and imposing sanctions on Turkey.

The appeal document seen by Reuters said the court should prevent any unlawful political interventions and lift judicial control provisions imposed on Brunson.

"I think the investor call Albayrak has scheduled has helped lira firm", said TEB Investment strategist Isik Okte.

All eyes will be on the lira when foreign exchange markets reopen on Monday after the weekend pause.

Amid a row with Washington over an American pastor being detained by Turkish authorities, the US has sanctioned two Turkish officials, with Erdogan blaming "economic terrorists" for the market sell-off.

The move is seen to be in retaliation to United States' decision to sanction two Turkish ministers over the continued detention of an American pastor on terror-related charges, and to double tariffs on Turkish steel and aluminum imports.

In an apparent reference to the United States, Erdogan said "the bullies of the global system can not roughly, shamelessly encroach on our gains that were paid for by blood". He insisted that Turkey's economic dynamic remain strong and said the Turkish currency would soon settle "at the most reasonable level".

Latest News