Turkish lira slips further against strong dollar
Increasing dollar strength against all emerging market currencies is pressuring the lira, analysts say
The Turkish lira approached a record low against the dollar on Friday, touching 2.517 in early afternoon trade.
The slump came as the dollar continued to show strength against a number of currencies.
The U.S. dollar index, a measure of the dollar against a basket of major currencies, climbed to a five-week high as data on U.S. inflation and production surpassed analysts' expectations.
The lira held at about 2.50 to the dollar, supported by Turkish data showing the country's foreign trade deficit declined to $4.31 billion in January from $6.89 billion in the same month last year.
"The deficit figures are what really drive the Turkish lira," commented Lars Christensen, chief forex analyst with Danske Bank in Copenhagen.
"Thanks to the drop in oil prices, the Turkish current account deficit and trade deficits have narrowed," Christensen said. "This is enabling the lira to hold close to current levels, despite the strong dollar."
Christensen pointed out that the Federal Reserve has made it clear that it will not soon hike interest rates.
"Dovish signals from the Fed are also helping the lira to hold firm," he added.
Last Modified: 2015-02-27 11:12:06
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