US dollar at historic high against lira

ANKARA (AA) – The U.S. dollar advanced to a historic high against the Turkish lira Monday amid anxiety in domestic markets due to parliamentary debate over the presidential system and other factors.

The U.S. dollar/Turkish lira rate hit the 3.7387 mark at midday, soaring 2.3 percent compared to Friday’s close of 3.6437, pushing overall appreciation of the dollar against the lira so far this year to nearly 6 percent.

The U.S. dollar index, which tracks the greenback’s value against a basket of major currencies, stands at 102.3 points, not far from 103.8 points, its 14-year high.

Another topic steering the market’s course was the start of parliamentary debate on constitutional changes to shift Turkey to a presidential system.

“The most important topic of the week is the start of constitutional amendment package debate,” said Enver Erkan, an economist from KapitalFx.

“The political debates and uncertainties over a possible referendum/snap elections mingled with security risks within geopolitical risks are elements of oppression for Turkish financial assets,” he added.

Murat Tufan, the head of Destek Securities’ Research Department, said the latest U.S. employment figures showed continued strong momentum in low unemployment, leading to speculations that the Fed may move more aggressively in raising interest rates.

“Anticipation for U.S. President-elect Donald Trump’s economic policies and remarks of Fed member Jeffrey M. Lacker on rate hikes will be faster in 2017 have fueled the rates,” Tufan said.