Large Additional Slide of the Turkish Lira
June 7, 2023
The dollar jumped 7.4% overnight against the Turkish lira. At the intra-day low of 23.1762 per USD, Turkey’s currency was 13.8% weaker than its close on May 26 just before the reelection of the autocratic President Erdogan.
Against other currencies overnight, the dollar lost ground, dropping 0.7% against Australia’s currency, 0.5% versus sterling, 0.4% relative to the Mexican peso, 0.3% vis-a-vis the Japanese yen, 0.2% against the euro, Swiss franc and New Zealand dollar, and 0.1% relative to the Chinese yuan and Canadian dollar.
Overnight net movements in 10-year sovereign debt yields and the price of oil were negligible, but bitcoin tokens and gold fell 1.5% and 0.2%.
The Japanese Nikkei dropped 1.8% after hitting a 33-year high on Tuesday. The German DAX, Paris Cac and U.S. stock futures show scant change.
China’s trade surplus narrowed 27% on month to $65.81 billion in May due to an unexpected 7.5% slide in exports.
A 0.2% rise of Australian GDP last quarter was the smallest gain in six straight quarters of positive growth. GDP was 2.3% higher than in the first quarter of 2022, down from year-on-year growth of 3.8% in 1Q 2022.
Revised GDP forecasts made by the OECD project growth this year of 2.7% in the world, 5.4% in China, 1.6% in the United States, and 0.9% in Euroland. OECD officials see the United States swapping places next year with growth of 0.9% in the U.S. and 1.5% in Euroland. If the OECD’s U.S. forecast of less than 1.0% growth in 2024 proves correct, Donald Trump’s chances for winning back the White House would be greatly enhanced.
German industrial production increased 0.3% last month, only half what analysts were projecting after a 2.1% plunge in April.
The French current account deficit of just EUR 144 million in April was down from EUR 2.44 billion in April 2022, reflecting a big drop in energy imports.
Italian retail sales just 0.2% in April following no change in March and a 0.1% dip in February. Sales growth from a year earlier of 3.2% was down from 6.2% recorded in January.
Norwegian industrial production rose 0.8% in April but was 4.7% below its year-earlier level.
The British Halifax house price index experienced its first 12-month decline (-1.0%) in 125 months during May.
A 1.4% drop in U.S. mortgage applications last week was the fourth consecutive decline. The cumulative decline has been almost 15% over that span.
Estonian CPI inflation of 11.3% in May was down from 13.5% in April and 24.8% last August.
Japan’s indices of leading and coincident economic indicators in April rose to 5- and 7-month highs but remained historically soft. The trend designation of the coincident index remained “weakening” for a fifth straight time.
Bank of Canada officials will announced their latest interest rate decision later this morning.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: China trade balance, German industrial production, OECD forecasts, Turkish lira since Erdogan's reelection
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