Oil slides on stronger dollar, Turkey contagion
|Burned by the lira
European bourses are echoing the decline across Asian markets this morning as a further fall in the Turkish lira causes selloffs and increased caution across stock markets.
The lira had already declined 20% against the dollar on Friday on a mixture of domestic financial problems and increasing friction with the US and the decline continued this morning with the Turkish currency plumbing new lows.
For the time being Turkey’s financial crisis looks localised but the country’s central bank has perhaps only days to stop the decline of the currency before the lira’s freefall results in loan defaults, starts seriously affecting the country’s financial system and potentially starts spilling over onto European banks. Into this domestically induced financial slide comes the deteriorating relationship between Turkey and the US. The US is holding it against Turkey that it is refusing to support US sanctions against Iran and that is not releasing an American pastor who is being held on terrorism charges. The US response was fairly clear cut – on Friday when the lira was in freefall the US announced it would raise the tariffs on imports of Turkish steel to 50% and the tariffs take effect Monday morning.
Oil slides on stronger dollar, Turkey contagion
Oil prices briefly perked up at the end of last week because the International Energy Agency said that sanctions against Iran could create supply problems later this year but a firming of the dollar offset the move higher and with the start of the new week oil prices began moving downward again. The deterioration of the financial situation in Turkey played a part too, and contributed to the risk aversion across markets. Brent crude is down 0.32% while the US listed West Texas Intermediate is trading 0.31% lower.
On the currency markets both the pound and the euro are lower against the dollar, sterling trading down 0.31% and the common currency down 0.39%.
Monsanto hit by $289 million bill over weed killer
Monsanto, now under its new parent Bayer, will have to pay out almost $300 million for using an ingredient in its weed killer Roundup which is believed to be causing cancer. A San Francisco Court ruled on Friday in favour of the claimants in the first lawsuit of thousands which are due to go to trial over the coming months. Bayer shares are down 11%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.