(Bloomberg) — The Turkish lira slumped by the most since August after U.S. President Donald Trump warned the nation against acting in excess in a military operation targeting Kurdish forces in Syria.
The lira weakened 2% to a session low of 5.82 against the dollar after Trump warned Ankara in a tweet that he would “totally destroy and obliterate” the nation’s economy if takes unspecified “off limits” actions.
Whether the Turkish lira will “really be impacted” by U.S. threats will depend on a possible response by President Recep Tayyip Erdogan and whether he moves forward with an invasion into Syria, said Brendan McKenna, a currency strategist at Wells Fargo Securities in New York.
“You would think new military operations in Syria could draw sanctions from the U.S. and the type of sanctions would also have an impact,” he said. If rhetoric escalates, probably see a move through 6.00/USD “pretty quickly.”
The lira may face further downside from the risk of of sanctions tied to Russian military equipment tied to sanctions linked to Syria, McKenna said.
A White House statement late Sunday said the U.S. wouldn’t stand in the way of an attack American-backed Kurdish forces in northern Syria, and had fueled speculation that a face-off between the allies could be averted.
Investors have been bracing for a Turkish occupation of a strip of northern Syria for months, but the risk of another flare-up between the estranged NATO allies risks derailing the recovery in the lira. A diplomatic fallout between Washington and Ankara last year triggered a currency crisis that dragged the nation into its first recession in a decade.
(Updates with lira move in second paragraph, strategist comments in third-fifth paragraphs)
–With assistance from Srinivasan Sivabalan and Sydney Maki.
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.
- Erdogan Warns Turkey May End EU Entry Talks, Slams Bloc for Breaking Promises
- Trump on Turkey going into Syria: 'It's not our border'
- Foreign Secretary Dominic Raab warns Turkey’s military assault against Kurdish-held areas in Syria will aid ISIS jihadis
- Turkey Delays Syria Military Operation to Avoid US Friendly Fire - Minister
- The 27 Republicans who voted with Democrats to block Trump from taking military action against Iran
- Turkey launches Operation Peace Spring military offensive on Syria
- Backlash as Trump clears path for Turkish military operations in Syria
- US withdraws troops from northern Syria as Turkey expands military operation
- Trump lifts Turkey sanctions, declaring success in Syria as Turkey and Russia fill void
- This is How Erdogan's Military Operation in Jarablus Complicates Syrian Puzzle
- US Coordinated Military Operation in Syria's Idlib With Ankara - Turkish Defence Ministry
- Turkey's Success in Northeast Syria Depends on Coordination With US - CHP Party
- Turkey's incursion into Syria 'madness', says Macron, as ceasefire holds
- Erdogan Expresses Hope to Discuss F-35 Exports With US Despite Trump's Threats
- Live Updates: Turkey's Offensive in Northern Syria Enters Its Second Week
- US military considers shooting down North Korea missile tests, sources say
- U.S. pulling troops from northern Syria posts, leaving Kurdish allies to face Turkey
- Turkey launches airstrikes on northern Syria after Trump pulls back U.S. troops
- Donald Trump says will impose sanctions on Turkey, prepared to ‘swiftly destroy’ its economy
- Turkey's Syria incursion: Can Ankara force NATO to provide assistance?
Lira Slumps as Trump Warns Turkey Over Military Operation have 588 words, post on finance.yahoo.com at October 7, 2019. This is cached page on Talk Vietnam. If you want remove this page, please contact us.