USDTRY Gaps Lower 2.5% After Erdogan Wins Turkish Referendum
- The Turkish lira rallied in the immediate aftermath of the big win for President Erdogan

The Turkish lira opened higher across the board after uncertainty surrounding the constitutional referendum in the country dissipated. The camp led by President Erdogan won the vote narrowly, dividing Turkey, with the Eastern part of the country with major cities and the capital Ankara voting against a presidential republic.
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Some brokers increased margin requirements on currency pairs that include the Turkish lira and could start rolling back trading conditions to normal in the coming hours. The changes hinge on further 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 can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. 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 can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term of the USDTRY and the EURTRY pairs, which are materially affected by the risk event.
A Divided Turkey
In what has been a very important political event in the history of Turkey, the country appears to be visibly divided on the matter of the powers of the President. Erdogan has been consolidating power for years and eliminating opposition rivals, but the European part of the country is resoundingly voting against the constitutional changes.
Erdogan is likely to have a hard time to consolidate his power further, as the opposition is preparing to contest the vote on grounds of manipulation. The current President's win is far from convincing with 99.8 percent of the votes counted, tallying up to a lead for the “yes” camp with 51.4 percent.
Future volatility will depend on the ways in which Erdogan handles the transition from a parliamentary to a presidential republic. Civil unrest and terror attacks are two major risks that could derail this process. Brokers that are offering currency pairs including the Turkish lira should remain cautious on the upcoming risks.
The Turkish lira opened higher across the board after uncertainty surrounding the constitutional referendum in the country dissipated. The camp led by President Erdogan won the vote narrowly, dividing Turkey, with the Eastern part of the country with major cities and the capital Ankara voting against a presidential republic.
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Some brokers increased margin requirements on currency pairs that include the Turkish lira and could start rolling back trading conditions to normal in the coming hours. The changes hinge on further 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 can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. 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 can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term of the USDTRY and the EURTRY pairs, which are materially affected by the risk event.
A Divided Turkey
In what has been a very important political event in the history of Turkey, the country appears to be visibly divided on the matter of the powers of the President. Erdogan has been consolidating power for years and eliminating opposition rivals, but the European part of the country is resoundingly voting against the constitutional changes.
Erdogan is likely to have a hard time to consolidate his power further, as the opposition is preparing to contest the vote on grounds of manipulation. The current President's win is far from convincing with 99.8 percent of the votes counted, tallying up to a lead for the “yes” camp with 51.4 percent.
Future volatility will depend on the ways in which Erdogan handles the transition from a parliamentary to a presidential republic. Civil unrest and terror attacks are two major risks that could derail this process. Brokers that are offering currency pairs including the Turkish lira should remain cautious on the upcoming risks.