Turkish lira implosion triggers safety flows in markets

The lira is imploding amid rising political risks in Turkey after Erdogan’s main rival and Istanbul mayor, Ekrem Imamoglu, was detained this morning. It’s pretty much a case of Erdogan enforcing his will in trying to bar anyone else from challenging his position as president and it is triggering financial dislocations in Turkish assets.

In turn, it is spilling over to broader markets now with a risk retreat across the board. The euro in particular is hit with EUR/USD down 0.6% to 1.0880 and EUR/CHF down 0.5% to 0.9545.

The dollar is among the beneficiaries with GBP/USD down 0.3% to 1.2960 and AUD/USD down 0.5% to 0.6330 currently.

I’m not seeing much other headlines that is triggering the quick market moves in the past 15-20 minutes. So, the events in Turkey seem to be what is spilling over elsewhere – at least for a bit.

S&P 500 futures are also now down 0.2% as risk appetite also gets sapped to start the session now.

This article was written by Justin Low at www.forexlive.com.