Analysts expect long-term volatility of Turkish lira.

Analysts expect long-term volatility of Turkish lira.
June 9, 2019, 8:22 pm

Turkish lira traders returning after the Ramadan holiday will have to make do with a look at the currency’s best run over the past five years, according to Bloomberg.

Experts advised that more political upheaval on the way means it could be a long wait before there’s a comparable winning streak.

The lira fell on Friday after a 10-day run of gains, the longest streak since May 2014, Turkish traders sat out much of that because of the three-day holiday.

Turkish currency is the greatest loser.

While they were away, emerging-market concerns resurfaced, with Mexico downgraded by Fitch Ratings and political tension mounting before a re-run of the Istanbul vote on June 23. The lira was the biggest loser among developing-nation currencies on Friday, weakening as much as 1.5% and trading down 1.2% at 5.8497 per dollar.

Be cautious.

“While the carry-friendly market environment seems favourable for the Turkish lira at first glance, traders should remain cautious with their long-lira positions in the coming weeks,” said Ipek Ozkardeskaya, a senior market analyst at London Capital Group. “The rally could be short-lived, carry traders should stay cautious before the political scene gets bad again”, she clarified.

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