BLBG:Lira Gains Against Dollar, Heads for Strongest in Three Weeks
The lira rose against the dollar, heading for the strongest level in three weeks, as investors viewed recent declines as overdone.
“Turkish lira weakness is somewhat overdone and further weakness is capped,” Henza Tukel, a currency trader at Turk Ekonomi Bankasi AS in Istanbul wrote by instant message today. “Last Thursday and Friday the lira gained strength very significantly, so in case there’s bad news flow, a retracement” is possible.
The lira climbed 0.1 percent to 1.7489 per dollar at 10:51 a.m. in Istanbul, heading for its highest closing level since Aug. 5.
The lira has been the world’s worst-performer among 31 major currencies, losing 12 percent this year as concerns about Turkey’s expanding current-account deficit drove the currency lower. The central bank says the current account will begin to improve in the second half of the year, driven in part by a weaker currency that makes Turkish exports relatively less expensive and imports relatively more expensive.
Governor Erdem Basci said Aug. 15 the currency was undervalued, when the lira was trading at around 1.77 per dollar.
Trading was subdued with the market in Turkey due to close at 12:30 p.m. for a holiday marking the end of the Ramadan holy month of fasting, and scheduled to reopen on Sept. 2.
“Price action is really one way, and there’s not much depth to it,” said Henza Tukel, a currency trader at Turk Ekonomi Bankasi AS in Istanbul. “The major players are all absent.”
To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
