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Hi all,
Lately there have been interesting moves in the markets. The mind of every investor is the Turkish Lira and its current slide. In addition, the Russian ruble, the Mexican peso and the South African Rand are making massive movements
Some experts call it a currency defeat in emerging markets. The fact is that emerging market currencies should not necessarily correlate with each other.
The only thing they really have in common is that they are trading against the US dollar. This lends to the theory that the whole story is actually led by the US Federal Reserve. While Jerome Powell is forced to react to the rise in inflation at home, other economies that rely on the stability of the dollar are bearing the weight
@MatiGreenspan
eToro, senior market analyst [19659006] The highlights of today
- Japanese Spillover [19659008] Watch the Lira
- Emerging Cryptos
Note: all data, figures and graphs are valid from August 13th. All trading involves risks.
Traditional markets
To think, this situation with the Turkish Lira began with Trump imposing sanctions on August 1, in relation to a detained pastor whom Erdogan refuses to release.
Now it seems that neither of them is willing to back off and the showdown is affecting most of the major currencies. The most important of which is the Japanese Yen, which is seen as a safe haven from this currency conundrum.
With the Yen's gain, the Nikkei 225 is suffering a blow because a stronger yen tends to hurt Japanese exports. [19659002] 
Watch the Lira
This early morning, the Turkish central bank made some strong words to try to minimize the damage.
This kind of rhetoric can sometimes have an impact on sentiment. The most famous thing is that Mario Draghi declared that he would do "everything necessary" to save the euro in 2012. However, investors today were looking for something more than the words of the central bank.
Later today we will also hear the new finance minister. This recently named figure is actually the son-in-law of Recap Tayyip Erdogan. So he will have to do a helluva show if he wants to impress anyone.
As I write, we see the test of USDTRY 7.
Those of you who are greedy readers will remember that this all started with a strong break in excess of 5 liras to the dollar.
So, in the same way, if we get a break of 7, things could get even worse.
Crypto Spillover
& # 39; I stated earlier, crypto-asset tend to correlate more closely with high-risk markets. So it would be reasonable to think that a sell-off of stocks could have a negative effect on the crypt.
Looking at the numbers however, it seems that the crypto markets are not influenced by the currency course of emerging markets and show a mixed performance
The crypto-enthusiasts now want to know if the Turkish citizens they are turning into a crypt as a stable reserve of value in front of a rapidly disadvantaged currency.
Well, it seems there have been some sources that seem to indicate this is the case.
Indeed, some Turkish exchanges report that their volumes have doubled in the last days. However, since at the beginning they were not trading incredible volumes, a 100% increase in some way did not seem to me to be a massive increase that would indicate mass adoption.
No doubt some have turned to bitcoins. Many citizens are doing their best to get their riches from Lira & # 39; s by any means possible and there are also reports of large queues in luxury malls.
Because it is not clear how the Turks access the bitcoin, it will be difficult to see if there has been an increase in adoption. What I am waiting for is the weekly coin.dance statistics, which should come out in the next few days.
We spend an excellent week!
This content was provided for informational and educational purposes only and should not be considered as advice or investment recommendation
The perspective presented is a personal opinion of the analyst and does not represent an official position of eToro.
Past performance is not indicative of future results. All trading involves risks; only risk capital that you are willing to lose.
Cryptocurrencies can fluctuate widely in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any regulatory framework of the EU.
Sincerely,
Mati Greenspan
Senior Market Analyst
Connect with me on …
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