Turkey's partnership with USA in jeopardy, Erdogan warns

Share

The currency has already fallen 36 percent in 2018 and has slid against the dollar on Friday.

Erdogan and Putin also voiced contentment regarding Turkey and Russia's ongoing cooperation in the energy and defence industry sectors, the source told CNBC.

The lira tumbled 14 per cent last Friday to 6.51 per dollar, a massive move for a currency that will make Turkish residents poorer and further erode global investors' confidence in the country. According to figures from the Turkish Government, for the period of 2002 to October 2017, Turkish direct investments in the United States reached $3.7 billion while US investments in Turkey amounted to $11.1 billion, second only to the Netherlands' 21.6 billion.

"Repeated efforts to communicate to the USA administration that none of the stated criteria driving America's tariffs are applicable to Turkey have thus far proven fruitless", Trade Minister Ruhsar Pekcan said in a statement. The yen has been playing out its usual safe-haven role while the greenback maintains its form on the 94 handle around the recent highs YTD of 96.45.

In the equity markets, the risk off sentiment was clear, with the Nikkei down 1.6% at the time of writing, a pickup in the Yen adding to negative sentiment, while the Hang Seng and CSI300 led the way, the pair down 1.81% and 1.80% respectively.

With the dollar seen to be absorbing safe-haven flows, the yen's gains against the greenback were limited.

A stronger dollar has also put more pressure on the currency.

Turkey's president declared today that "we will not lose the economic war", but Recep Tayyip Erdogan is certainly not winning it. Prospects grew even dimmer after Donald Trump literally doubled down on sanctions earlier announced against Turkey, in response to a failed deal to free Pastor Andrew Brunson and Erdogan's lurch towards Islamist dictatorship.

David Ornstein: Arsenal Agree Deal With Torreira - Signing Imminent
But the official confirmation of a transfer has been delayed by Torreira's global involvement with Uruguay in western Europe. The BBC's David Ornstein has claimed that Arsenal have agreed on a deal with Lucas Torreira over the player's transfer.

Donald Trump took to Twitter yesterday to boast about the value of the dollar against the lira.

Turkey's trade ministry said the tariffs were against World Trade Organisation rules.

The euro was down 0.4 percent for the week, dogged by renewed investor concerns that Italy was heading for a costly and unsustainable spending spree.

Currently, USD/JPY is trading at 110.64, up from the low of 10 pips lower - the pair had recovered to a high of 110.75.

In the first three months of 2018, Turkish steel exports to the United States fell almost 50 percent over the same period in 2017, making it the only top-10 source of US steel imports to see a decrease, according to the US Commerce Department.

Turkish Trade Minister Ruhsar Pekcan called on the USA to return to the negotiating table.

The rouble retreated overnight to its lowest since November 2016, weakening beyond the psychologically important 65-per-dollar threshold.

The lira sell-off deepened concern over whether over-indebted Turkish companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Erdogan. EURUSD broke chart support in the 1.1520-30s, emerging markets went offered, global equities got sold, developed market bond yields ticked lower, the JPY went broadly bid, and all of a sudden traders were rushing for the Dollars across the board in a risk-off type manner.

Share