Get Ready for TRY/USD Volatility as Turkish Lira Takes a Dive
- The Turkish lira suffered the biggest one-day drop in years following the alleged failed coup attempt in the country.
FX traders and brokers with remaining exposure to the Turkish lira should brace for additional Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate at market open and beyond. Caution is of course also recommended to those with any exposure to leveraged Turkish stocks via CFDs.
On Friday the Turkish Lira suffered the biggest one-day drop since October 2008 following the alleged failed military coup attempt in the country - the TRY/USD fell as much as over 4.5% to the 3.0157 level which it had not visited since January 2016. However, since the market closed for the weekend, a lot of new developments happened on the ground in Turkey that might make the currency either continue to fall or bounce back sharply.
Strong volatility and sudden falls in value are not new to the Turkish lira, as we have sadly seen this before when investors were reacting to news of terrorists attacks in the country. This time however the long term effects on the currency (and the Turkish stock market) might be more prolonged as the event was not an outside terrorist attack, something that is all too common these days, but a severe domestic show of instability.
If investors will fear that the Turkish economy is heading south, with the all important tourism sector damaged for years, the Turkish lira might get into a more long term bearish trend. One the other hand, confidence in the Erdogan government's ability to restore growth might be regained now that it is centralizing power in the country and removing political opposition.
FX traders and brokers with remaining exposure to the Turkish lira should brace for additional Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate at market open and beyond. Caution is of course also recommended to those with any exposure to leveraged Turkish stocks via CFDs.
On Friday the Turkish Lira suffered the biggest one-day drop since October 2008 following the alleged failed military coup attempt in the country - the TRY/USD fell as much as over 4.5% to the 3.0157 level which it had not visited since January 2016. However, since the market closed for the weekend, a lot of new developments happened on the ground in Turkey that might make the currency either continue to fall or bounce back sharply.
Strong volatility and sudden falls in value are not new to the Turkish lira, as we have sadly seen this before when investors were reacting to news of terrorists attacks in the country. This time however the long term effects on the currency (and the Turkish stock market) might be more prolonged as the event was not an outside terrorist attack, something that is all too common these days, but a severe domestic show of instability.
If investors will fear that the Turkish economy is heading south, with the all important tourism sector damaged for years, the Turkish lira might get into a more long term bearish trend. One the other hand, confidence in the Erdogan government's ability to restore growth might be regained now that it is centralizing power in the country and removing political opposition.