Dollar off 13-month peak, emerging currencies up on Sino-U.S

Marco Green
August 16, 2018

Investors are anxious not only about Turkey's souring relations with the US, a longtime North Atlantic Treaty Organisation ally, but also Turkish President Recep Tayyip Erdogan's economic policies and the country's high debt accumulated in foreign currencies.

The White House said on Tuesday President Donald Trump was frustrated that Turkey had not released Brunson.

"When the dollar turned in the second quarter we had a really weak EM market", Said Haidar, founder and chief investment officer, at NY hedge fund Haidar Capital Management, said.

President Recep Tayyip Erdogan said Tuesday that Turkey would boycott USA -made electronic products, escalating a feud with the Trump administration that has contributed to the rapid decline of the Turkish currency. Erdogan accused the United States of conspiring against Turkey and said that the slide in its currency doesn't make any sense logically.

"The president has a great deal of frustration on the fact that Pastor Brunson has not been released as well as the fact that other USA citizens and employees of diplomatic facilities have not been released", White House Press Secretary Sarah Sanders told a briefing.

"We are ready with everything we have", Erdogan said, according to Ahval.

President Erdogan has done much to undermine that confidence since his first election in 2014, drastically shifting Turkey's political system away from liberal democratic fundamentals toward one-man rule.

The greenback had drawn strength after a tough week for emerging market currencies, initially led by the rout in the Turkish lira.

The Turkish central bank has promised that Turkish banks will have all the money they need. Ties between the two North Atlantic Treaty Organisation allies have also nosedived over U.S. support for Syrian Kurdish forces, Ankara's plans to buy a Russian missile system and Turkey's demand that Washington extradite US-based Islamic cleric Fethullah Gulen, whom Erdogan blames for the failed July 2016 coup bid.

His call met a mixed response on Istanbul streets.

Goh is predicting that the ringgit will trade at 4.08 against the USA dollar by the end of the year. "What do you want to achieve?" he added, referring to the US.

But shopkeeper Umit Yilmaz scoffed. All these people are supposed to not buy iPhones now? On Tuesday, one dollar was worth 7.2 lira.

"We will boycott U.S. electronic goods", Erdogan said in a speech in Ankara, again showing no sign of compromise in the dispute.

"There is a price we're paying for the period we're in", Erdogan said, referring to his country's plummeting currency.

Turkey's ambassador to Washington Serdar Kilic on Monday held talks with US National Security Advisor John Bolton in a meeting what Foreign Minister Mevlut Cavusoglu said was arranged by the White House.

Turkey has meanwhile resisted pressure to release Brunson - who has been held for two years and is now under house arrest - with officials warning it could face further sanctions.

Turkey and the US are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American pastor Andrew Brunson, who faces terrorism charges in Turkey.

Brunson's lawyer Cem Halavurt confirmed to AFP that he appealed for the release of his client once again on Tuesday, saying that: "The court should deliver its ruling in the next three days".

Other reports by Click Lancashire

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