The Dollar Fell, Then Higher Against Turkish Lira
July 9, 2019 | Tuesday
In early trading in Europe, the dollar was a little lower. However, it held on to most of its gains it posted following a stronger-than-expected U.S. employment report on Friday. As a result, the Federal Reserve might back out from its plan to cut interest rate.
On the other hand, the dollar surges to almost 2.5% against the Turkish lira. The rise happened after President Recep Tayyip Erdogan dismissed central bank governor Murat Cetinkaya during the weekend. Aside from that, the decision of Erdogan raised concerns about the security of lira. Previously, the president puts pressure on the central bank to have an interest rate cut despite an annual inflation rate over 15% in June.
Moreover, the removal of Cetinkaya is a representation of the political pressure on central banks all over the world as the economy weakens under the influence of trade war between the U.S. and its most important trading associates. Another example is the trend which will come on Wednesday and Thursday when Federal Reserve Chairman Jerome Powell declares before Congress.
Meanwhile, the euro stood firm at $1.229. And it was still unchanged from Friday's close in Europe. In addition to that, the single currency stayed under pressure following a weaker-than-expected outcome of the German industrial production data for May. However, the figures were not as pleasing as the bigger fall in factory orders showed last Friday.
heightened consumer demand after President Emmanuel Macron's concessions to the yellow vest protest movement.
Then going back to the dollar, its index was at 96.82 against a basket of major currencies.
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