Lira Drops To 8-Month Low Against Dollar

The Turkish lira opened at 2.2840 against the dollar on Monday morning, an eight-month low that follows a sharp and continuous decline during the month of September.

The lira rose slightly during the day, hitting the 2.2781 mark in the late afternoon, before dropping below the 2.28 mark again shortly after. Starting the month at 2.15 against the American currency, the lira has dropped by around 6 percent. In recent months, the dollar has surged against nearly every other major currency.

Borsa İstanbul (BIST), Turkey's stock exchange, opened the day with a 313 point increase, reaching 74,901 points, before falling slightly later in the afternoon.

Meanwhile, in American markets the Dow Jones, Nasdaq and S&P500 all decreased slightly during early trading on Monday.

The dollar hit its highest in almost two years against the euro, with German inflation data expected to keep pressure on the ECB to ease monetary policy. Unrest in Hong Kong hurt Asian-exposed European shares.
The dollar was broadly stronger, reaching a four-year high against a basket of currencies, a six-year peak against the yen and a 13-month high against the New Zealand dollar. Reserve Bank of New Zealand data showed the central bank intervened last month to speed its currency's descent.

Data on Friday showing higher US growth in the second quarter fuelled speculation that the Federal Reserve may raise interest rates sooner than expected, in contrast with the outlook for the European Central Bank. "The U.S. dollar has become the currency of choice," said Philip Shaw, chief economist at Investec.

Near-zero inflation in the eurozone is nurturing expectations the ECB will eventually start printing money to buy government bonds, through a program known as quantitative easing, or QE.

The euro earlier dropped to a 22-month low of $1.2664 and last stood at $1.2680, a touch lower on the day.

The dollar index, which tracks the US unit against a basket of major rivals, climbed as high as 85.798. It was last a tad higher at 85.677. "The strength of the dollar is forcing investors to move away from a lot of the stock market assets and put it into the greenback," said James Hughes, chief market analyst at Alpari. "With a potential rate hike becoming more likely and the data showing constant improvement, it's no surprise we are seeing the positive move."
The pan-European FTSEurofirst 300 index was down 0.37 percent at 1,371.92 points, as unrest in Hong Kong hit Asia-exposed shares, such as HSBC, Standard Chartered or Richemont, the owner of jeweler Cartier.

(Cihan/Today's Zaman)