© Reuters. Lira Falls Past 6 Per Dollar as Istanbul Vote Hangs Over Market
(Bloomberg) — The Turkish lira fell past a key psychological level against the dollar as traders braced for the prospect of prolonged political turmoil and as a global market rout piled pressure on emerging-market currencies.
The dropped as much as 0.7 percent to 6.0048 per dollar, breaching the key 6-per-dollar mark to touch the lowest level in seven months. It was trading at 5.9971 as of 10:14 a.m. in Istanbul. The currency’s losses are being compounded by a global sell off after U.S. President Donald Trump threatened to boost tariffs on China.
The nation’s highest election authority is due to rule as early as Monday on the governing AK Party’s request to re-run March’s municipal election in Istanbul, where it suffered a narrow defeat. President Recep Tayyip Erdogan on Saturday called on the authorities to have new elections in the country’s largest metropolis.
The possibility of a fresh election has weighed heavily on appetite for lira assets. Investors say it could give way to political tension, populist economist measures that would further delay key structural reforms needed to help right the economy, and taint the country’s fraying democratic standing.
As traders awaited the ruling, the dollar-lira pair formed a so-called golden cross, when a security’s 50-day moving average rises above its 200-day reading. The dollar gained all three times the pattern was formed over the past five years.
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