This Thursday, the Central Bank of Turkey is expected to reduce rates to single digit. I do not feel the need to comment further on this issue since I have written many times before about the pros and cons of constantly cutting interest rates.
The Fed signalled smaller rate hikes due to a decreasing US inflation. But it is too early to say the same for EU countries. The ECB seems likely to continue its interest rate hiking cycle, in which case we might see a swift rise in the Euro-Dollar exchange rate, euro slipping below 1.05 against the US dollar.
Any sharp movement in Euro-Dollar exchange rate affects Turkish exports. It is obvious that further stability of the duo would compensate both for the losses arising from volatility and also help improve the current account balance. You don’t need to be an economist to notice that an ever-appreciating dollar is upsetting the balance. However, the global appreciation of the US dollar is not sustainable. I said this in all conferences I have attended throughout October, encouraging people to Euros while the US dollar is relatively strong compared to the Euro.
“Fortunes Melted With Cryptocurrency Crash”
As crypto market continues to bleed and investors see their fortunes melt, the argument between those who advocate that decentralized mediums of exchange should be regulated and those who argue that they should not does ever stop. More and more people expect that the stock market will continue tumbling as well. I also hear that some speculators, who had an open position and made some serious money just before the 2008 crisis, are keeping their guard up again these days, alert to the possibility of an unanticipated rise.
All this confusing news triggers the motivation to trade without tying up too much money in one position as volatility is increasing every day. So, you should know that we are about to enter a process where all investors need to watch the market 24/7.