The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate remained flat on Wednesday, leaving the pairing trading at around ₺7.7433.
This morning, data revealed that confidence in Turkey’s economy rose, hitting a 21-month high at the start of 2020.
The Lira was provided with an upswing in support as confidence rose for the fourth month in a row to 97.1 from December’s 96.5.
The jump in confidence was largely driven by increases in construction, retail trade, services, and consumer confidence.
The country’s construction confidence index was the best performer in January, jumping by 14.6%.
This comes as the Turkish economy is emerging from a downturn caused by a currency crisis that began in August 2018.
Wuhan Virus Fears Ease
The Turkish Lira remained flat against the Pound as the mood amongst investors calmed as markets awaited further news about the Wuhan coronavirus.
Appetite for safe haven currencies eased on Wednesday as investors waited to see how much economic damage the spread of the virus is likely to cause.
However, the Lira was left flat as moves in currency pairing were tight as traders remained on edge about the virus which has now claimed over 130 people in China.
Commenting on this, Head of Research at brokerage Pepperstone, Chris Weston said:
‘The way risk is trading, people are saying that perhaps we reached peak worries, peak fear.’
BoE Rate Cut Fears Leave Sterling (GBP) Exchange Rates Flat
Sterling remained under pressure today, ahead of the Bank of England’s (BoE) monetary policy meeting.
Markets remain split on whether the bank will cut rates, as it is too close to call despite better-than-expected UK economic data last week.
However, many expect the bank to ease monetary policy for the first time since 2016.
Commenting on the prospect of a rate cut, Robert Wood, chief UK economist at Bank of America said:
‘We had thought that the MPC might wait until a few months after the general election, or the chancellor’s first Budget, to make a decision on interest rates.
‘But it seems as though they might want to offer a helping hand to the economy a bit sooner than expected.’
Pound vs. Turkish Lira Rate Outlook: Will the Bank of England Slash Interest Rates?
Looking ahead to Thursday, the Pound (GBP) could slump against the Turkish Lira (TRY) following the Bank of England’s (BoE) monetary policy meeting.
If the bank cuts interest rates for the first time since July 2016, the Pound Sterling Turkish Lira (GBP/TRY) exchange rate will slide.
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