What happened to the Turkish lira?The Turkish lira dropped 14% to 6.46 per dollar, the weakest on record with the largest drop in more than 17 years. The lira ended the week at a record low against the U.S. dollar. Tension between the U.S. and Turkey played a part in the decline as President Trump tweeted plans to double tariffs on Turkish steel and aluminum imports. This potential tariff hike followed a stalled conversation between the two countries concerning an imprisoned U.S. pastor who Turkey believes supported a 2016 attempted coup.
How did investors react?The resulting drop in the lira’s value concerned investors and led to losses in markets worldwide. Friday, the S&P 500 marked its largest daily decline since June after getting close to a new record high.
Why do investors care?The lira’s drop is another sign that emerging markets are experiencing challenges in their economies. Some investors worry that Turkey’s economic crisis could spread to other countries or affect interest in other emerging markets.
Should you be concerned?Probably not for now. U.S. companies don’t have a tremendous amount of exposure to Turkish markets. We know that global dynamics can be complex and understanding their specific effects on your financial life may seem challenging. If you have any questions, contact us any time.
ECONOMIC CALENDARTuesday: Import and Export Prices Wednesday: Retail Sales, Industrial Production, Housing Market Index Thursday: Housing Starts, Jobless Claims Friday: Consumer Sentiment
Quote Of The Week
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. – Edmund Burke