Fresh Weakness In Turkish Markets, Lira Weakens


During Wednesday the Euro was hampered to some extent by fresh weakness in Turkish markets as the lira weakened sharply.

In this environment, the single currency retreated on most crosses which also dragged EUR/USD lower with a retreat to lows near 1.1650 ahead of the New York open.

US second-quarter GDP was revised slightly higher to 4.2% from the provisional estimate of 4.1% and above consensus forecasts of 4.0% even though the consumer spending estimate was revised slightly lower. The dollar ticked higher following the release, although the overall impact was muted.

Sharp Sterling gains following comments by EU Chief Negotiator Barnier also had a significant impact in pushing the Euro stronger.

Evidence of increased EU determination to secure a Brexit deal would also tend to reduce the risk of damage to the Euro-zone economy and an element of optimism provided underlying single-currency support.

In choppy trading EUR/USD moved back above 1.1700 as the dollar index closed little changed amid divergence in majors. The dollar secured some support from renewed stresses in emerging markets with EUR/USD consolidating below 1.1700 in early Europe on Thursday after another failure to break above the 1.1720/30 resistance zone.

In-house Analyst


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