22 Mar 2021
At the start of the week, the Euro-to-Dollar exchange rate proved its strength, amid the expected volatile trading situation as the Turkish central bank is considering pushing back the Lira. The EUR/USD is trading at 1.1904 at the time of writing, sustaining the traders’ preference since January.
The Turkish Lira took the headlines after seeing new losses similar to the what the British Pound had faced following the Brexit referendum. This is a result of the sacking of another Central Bank of the Republic of Turkey (CBRT) Governor, Naci Ağbal, after the rise in interest rate. The currency fell by more than 17% against the Dollar, Euro and Pound during the first hours of Sunday’s Asian open.
Strategists noted, “The Turkish lira may easily sell-off 10-15%, with 7.50, 7.79 and 8.00 vs. USD easily achievable. We will see this start on Monday, when Asia trading kicks in. Turkish authorities will try to lean against this move, likely deploying an array of measures. They may be somewhat effective for a start, but we question their ability to be successful for long in the current environment. The best course of action for now is likely to buy USDTRY."
Moreover, the GBP to EUR exchange rate trades at 1.1658 on Monday whereas the Sterling trades at 1.3855 against the USD. The UK’s vaccine programme is boosting its currency’s rally, but a near-term pause is expected. “The UK is vaccinating at a much faster pace than the rest of Europe, which, combined with the Brexit deal, means the UK is set to outperform the rest of Europe beyond Q1 21,” analysts pointed out.
Over the weekend, the UK set new records for vaccinations, administering 29,859,742 doses. This showed optimism when compared to the Eurozone countries which continue to struggle with the pandemic and the variants.