Turkish lira hits 6-week high against US dollar

ANKARA The Turkish lira appreciated against the U.S. dollar early on Thursday amid hints from the Federal Reserve pointing to rate hikes as soon as March. The U.S. dollar/Turkish lira rate dipped to as low as 3.5756 points, the lowest figure since Jan 4, when the rate began its move towards its historic high of 3.9423 on Jan. 11. The lira advanced against the dollar despite Fed minutes showing "it might be appropriate to raise the federal funds rate again fairly soon” if labor market and inflation figures were “in line with or stronger than their current expectations”. Analysts believe rising risk appetite in global markets plus monetary tightening by the Central Bank of Turkey is supporting the Turkish lira against other currencies. Deniz Cicek from QNBFinansBank wrote in note to clients: “TRY continued to strengthen on account of the ongoing tight monetary policy. “USD/TRY trended down and touched below 3.60 in the afternoon [Wednesday], before ending the day at 3.6070. “Following last night’s release of the FOMC minutes, TRY gained as the dollar weakened globally.” In a different client note, Seker Investment said the U.S. dollar retreated globally due to less-hawkish tone in Fed minutes than was anticipated. “Global stocks retreated somewhat midweek; the USD also declined following the release of the U.S. Fed’s minutes of its Jan. 31-Feb. 1 FOMC meeting, which included a less than recently imagined hawkish tone, thus providing almost no support to the possibility of an interest rate increase in March” the note read.