The Turkish lira continued its slide on October 11 amid ongoing geopolitical tensions and renewed expectations for a FED rate hike.
The signing of Turkish Stream pipeline project failed to boost confidence in the Turkish lira, which fell 0.7% to trade at 3.0868 per dollar as of 11:45am Istanbul time. The local currency has lost more than 3% of its value against the greenback since September 23, when Moody’s cut Turkey’s credit rating into junk. The main stock exchange index, BIST-100, was down 0.4% in morning trading on October 11. The index fell 2% between September 23 and October 10.
Investors will be watching statements from FED officials this week to see clues for the direction of US interest rates. The markets also keep a close eye on geopolitical developments, such as heightened tensions between Turkey and Iraq over the presence of Turkish soldiers and a planned attack on Mosul, coordinated jointly by the US-led coalition and local Iraqi forces, to retake the city from Islamic State. It is not known yet whether Turkey, which is conducting its own military operation in northern Syria against the jihadi group at present, will take part in the Mosul operation.
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