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17 Apr 2015
Attractive carry trade around TRY – Danske Bank
FXStreet (Edinburgh) - Vladimir Miklashevsky, Economist at Danske Bank, sees better prospects for the Turkish currency in the upcoming months.
Key Quotes
“The Turkish economy has been showing clear signs of slowing over the past couple of years but falling energy prices and the decelerating CPI are yielding better prospects for 2015-16”.
“The Turkish central bank has been under considerable political pressure to cut interest rates further and relatively weak growth and softening inflationary pressures might open the door for further rate cuts. However, any major negative shock to the lira could cut such rate cut hopes short”.
“Lira sentiment seems to have become slightly negative and the lira continues to offer attractive carry”.
“Furthermore, the sharp fall in oil prices over the past year is clearly helping reduce Turkey’s large current account deficit and this is certainly supportive for the lira over the medium term”.
“We expect the TRY to strengthen over the coming year on positive carry, smaller current account deficit”.
Key Quotes
“The Turkish economy has been showing clear signs of slowing over the past couple of years but falling energy prices and the decelerating CPI are yielding better prospects for 2015-16”.
“The Turkish central bank has been under considerable political pressure to cut interest rates further and relatively weak growth and softening inflationary pressures might open the door for further rate cuts. However, any major negative shock to the lira could cut such rate cut hopes short”.
“Lira sentiment seems to have become slightly negative and the lira continues to offer attractive carry”.
“Furthermore, the sharp fall in oil prices over the past year is clearly helping reduce Turkey’s large current account deficit and this is certainly supportive for the lira over the medium term”.
“We expect the TRY to strengthen over the coming year on positive carry, smaller current account deficit”.