8 Jun 2015
USD/TRY could be headed to 3.00 – TDS
FXStreet (Edinburgh) - Strategist Cristian Maggio at TD Securities sees the pair inching higher following the recent Parliamentary elections in Turkey.
Key Quotes
“With almost all votes counted, the AKP has won 41% of votes in the general election, which translates into 258 MPs, short of the 276 majority required to form a single-party government”.
“This outcome falls under our worst-case scenario, where no single party has an absolute majority in parliament and will require a governing coalition. Turkey could also go to early elections as a result of failed attempts to forge an alliance”.
“The only market reaction that we can envisage is further weakness of lira, rates and stocks for now”.
“While the announcement that an agreement to form a coalition would be market positive, we warn against excessive enthusiasm as any alliance would remain fragile. If any alliance is to be announced soon, that would be AKP+MHP”.
“But with a breakup possible anytime, we see little scope for lira strength even after an initial positive market reaction and would see USDTRY heading to 3.00 in the remainder of the year”.
Key Quotes
“With almost all votes counted, the AKP has won 41% of votes in the general election, which translates into 258 MPs, short of the 276 majority required to form a single-party government”.
“This outcome falls under our worst-case scenario, where no single party has an absolute majority in parliament and will require a governing coalition. Turkey could also go to early elections as a result of failed attempts to forge an alliance”.
“The only market reaction that we can envisage is further weakness of lira, rates and stocks for now”.
“While the announcement that an agreement to form a coalition would be market positive, we warn against excessive enthusiasm as any alliance would remain fragile. If any alliance is to be announced soon, that would be AKP+MHP”.
“But with a breakup possible anytime, we see little scope for lira strength even after an initial positive market reaction and would see USDTRY heading to 3.00 in the remainder of the year”.