Euro-Dollar Parity and GDP Figures.
When EUR to USD exchange rate climbed above 1.10 after a long time, I thought I should take a look at the comments and analyses on the increase. But by the time I finished reading all, the duo fell below 1.10 again. Still, I feel the need to bring my own comment on this movement.
“The dollar depreciates amid bad news from the US economy.” This is one of the most common misconceptions among the public. Even though the US economy continues to go bad to worse, the US dollar is still the only safe haven for investors. Therefore, the reason why the US dollar keeps losing ground to Euro cannot be explained by the power of Europe. The value of the US dollar, which still maintains its status as the primary reserve currency in the world, could only drop permanently if the risk appetite level of investors to 2018 levels. And those days will come too.
The rise in the price of gold shows us that uncertainty is growing and that some investors do not fully return to the markets after seeing the dollar slide even further. Given that a complete trust in Euro and Dollar has not yet been established and that conflict will rise again after the ceasefire in the Middle East, the current trend should be considered normal.
It is reported that Thanksgiving sales in the US hit record highs compared to last year, and businesses are expected to generate a total revenue of $1 Trillion in two months until the end of the year, including the revenue from Christmas and New Year sales. As November consumer confidence beat estimates, the reason for the rise in Euro-Dollar exchange rate becomes clear.
As for the growth figures in Turkey, while experts and analysts were expecting a growth between 5% and 5.5% in the third quarter, the figure came out as 5.9%.
Unlike those who said that the economy would boom with more construction activities after the earthquake, I chose to be rather cautious and said that it would find balance somewhere between 3.5% and 4.5%. According to optimists, we will see an economic growth of 3.9% in the first quarter, 3.8% in the second quarter, 5.9% in the third quarter, and 4.2% by the end of the year.
These expectations also indicate that the fight against inflation is apparently put on hold until local elections as all efforts are focused on increasing growth. I see some of my colleagues enthusiastically support the government’s monetary and fiscal policies, but I would like to remind them of the fact that the right ones are not in place yet.
