The Pound Sterling to Euro (GBP/EUR) exchange rate jumped on Tuesday morning as the Greek drama continued to unfold, while the Pound Sterling to Turkish Lira (GBP/TRY) exchange rate remained in a narrow range ahead of the Central Bank of the Republic of Turkey (TCMB) interest rate decision.
Greek Negotiations cause Extreme Euro to Pound Sterling (EUR/GBP) and Euro to Turkish Lira (EUR/TRY) Exchange Rate Volatility
— Derek Gatopoulos (@dgatopoulos) June 23, 2015
The continued talks between Greece and its creditors have seen the Euro (EUR) exchange rate yo-yo as investors attempt to price in a Greek deal, or possibly a Greek default. However, despite progress appearing to be made, it’s unknown whether the deal Greek Prime Minister Alexis Tsipras has the potential to make will even pass through parliament.
Sociéte Générale representative Kit Juckes commented: ‘Assuming we do indeed get the last-minute deal everyone expects, then we will simply move on to wondering whether it can be ratified by individual parliaments and then, how long it will last before we need another one.’
The European Central Bank (ECB) has been rumoured to have given Greece an extra €1.bn in emergency liquidity today to help the nation while talks continue.
Turkish Consumer Confidence Climbs, Bolstering Lira to Pound Sterling, Lira to Euro (TRY/EUR) Exchange Rates
Meanwhile, Turkey has had an interesting start to the week and the Lira (TRY) exchange rate was able to register gains during Monday’s European trading. The Turkish Consumer Confidence ecostat managed to climb from 64.29 to 66.45 in the month of June rather than sinking to the 63.71 forecast.
Additionally, Turkey’s Central Government Debt number came in at 647.2B Turkish Lira (TRY) in May, following the previous month’s 647.7B Lira. Economists had forecast a climb to 656.3B.
However, the main event for the Turkish Lira (TRY) exchange rate this week is the TCMB interest rate decision, scheduled for 12:00 GMT on Tuesday. Economists believe that interest rates will remain at 7.5% in June.
Turkish General Election Uncertainty Weighing on Lira (TRY)
The Turkish Lira (TRY) has been extremely susceptible to political developments in recent weeks after a rather surprising general election. However, it appears as if pressure on the Lira (TRY) won’t let up for some time with signs that President Recep Tayyip Erdogan is struggling to form a government making the possibility of repeat elections a very real threat.
ING strategist Pinar Uslu commented: ‘A lack of signals for a strong coalition government may enhance pressure on the Lira. MHP’s rigid stance and a slight increase in the possibility for repeating elections seem to escalate investor concerns.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate in for Quiet Week with Little UK Data
The Pound’s (GBP) in for a quiet week ahead but the release of Tuesday’s CBI Trends Total Orders and Trends Selling Prices data could cause some market movement.
However, perhaps more influential for the Pound (GBP) will be Wednesday’s BBA Loans for House Purchase ecostat, which is forecast to moderately impact the Sterling (GBP) exchange rate.
The Pound Sterling to Turkish Lira (GBP/TRY) exchange rate is trending at 4.2237.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.4056.