Further rate cuts likely to add to the lira’s woes

The lira fell to a new low against the US dollar today as a result of a larger-than-expected cut of 200 bp to the 1-week repo rate by Turkey’s central bank (CBRT). Continued pressure from President Erdogan probably means that further cuts are on the horizon, and so we expect the lira to continue to lose ground against the US dollar over the next couple of years.
Joseph Marlow Assistant Economist
Continue reading

More from Capital Daily

Capital Daily

We see little upside for developed market corporate bonds

Even if the global economy proves fairly resilient to Omicron, we don’t think that there is much scope for corporate bonds to perform better than government bonds over the coming years.

2 December 2021

Capital Daily

Omicron & Powell present risks to our Treasury yield view

The spread of the Omicron variant and Fed Chair Powell’s latest comments to Congress both present some downside risks to our view that the 10-year US Treasury yield will end next year some way above its current level.

1 December 2021

Capital Daily

Omicron, Powell and the US dollar

With financial markets already firmly in risk-off mode following the emergence of the Omicron variant, Fed Chair Powell’s suggestion that the FOMC may still increase the pace of policy tightening has added further pressure on risky assets and reversed much of the dollar’s weakness over the past few days. Should policymakers stick to their guns on policy tightening, we may well see further dollar strength in the coming weeks.

30 November 2021

More from Joseph Marlow

FX Markets Update

We expect the rally in commodity currencies to be short-lived

Although we wouldn’t be surprised if energy prices remained elevated for a while, we still think they will fall back over the next year, weighing on the currencies of net energy exporters.

14 October 2021

Capital Daily

We expect long-dated Treasury yields to rise further still

The 10-year Treasury yield rose to its highest level since June on Friday amid growing concerns about inflation. We forecast that the yield will rise further over the coming years, as investors reassess how much the Federal Reserve will need to tighten policy to keep it under control, or else demand even greater compensation for inflation than they are now.

8 October 2021

FX Markets Update

We think the Norwegian krone’s rally is nearing its end

Although the krone has rallied this year on the back of high energy prices and the expectation of tighter monetary policy, we do not expect this to continue. We think slowing global growth and normalising energy prices will work against the krone over the next 12-18 months. Our view is that these headwinds will be balanced by more hawkish monetary policy, resulting in a broadly stable outlook for the krone. In view of the wider interest, we are also sending this FX Markets Update to clients of our Nordic & Swiss service

7 October 2021
↑ Back to top