Parity is on exports’ side….

Two very important developments took place yesterday:

  • A 16% increase in January exports according to Turkish Exporters’ Assembly (TİM)
  • Euro/Dollar parity rising above 1, 25

Two of them are highly correlated with each other. Almost 50% of Turkey’s exports go to the EU. Accordingly, Euro’s appreciation brings a quite positive impact on exporting activities. But, I think Turkish Exporters’ Assembly absolutely needs to release the “parity-free export rise” as well.

On the other hand, it looks like businesses with dollar debt, but earning in euros are slowly starting to gain more advantage. As matter of fact, they don’t necessarily need to be in debt, the same goes for those who have dollar inputs, but Euro outputs.

Normally, the saying goes like this: “If you are going to owe money, at least owe it in the same currency you earn it”, but this times markets have offered a different opportunity. Apparently, those who earn euro income will not experience any difficulties in paying their dollar debts for a little while longer.

“Where the Euro/Dollar go?”

We will see whether or not the Euro/Dollar parity, which was pushing below 1.06 almost on a daily basis in 2015, will keep rising slowly until hitting 1, 38 just like it did in 2014; because, the level of 1.30, although it is not technical, mostly stands out as a psychological resistance level.

In the meantime, stock exchange, exchange rates and benchmark rates, they all went down yesterday, which may have been caused by movement of funds. Apparently, markets have become mediums where prices can be easily affected by day traders.

You know what they say, “No one is greater than the market itself”. But I guess it will take some time for us to realize that.