Turkish Lira under pressure after Fitch downgrades Turkey to junk – Danske Bank

Dhwani Mehta FXStreet

Analysts at Danske Bank note that the Turkish sovereign rating downgrade by Fitch Ratings keeps the Lira pressured.

Key Quotes:

“The Turkish lira is under pressure this morning following Fitch's decision to cut Turkey's sovereign further to Junk over the weekend. Fitch reduced the nation's long-term foreign currency debt rating to BB-, three notches below investment grade and on par with Brazil, Greece and Bangladesh.

The ratings company warned of deteriorating institutional independence and economic policy credibility after President Recep Tayyip Erdogan unexpectedly removed Cetinkaya as his central bank chief last week.

On top of the concerns of institutional independence in the country, there is a looming risk of tightening US sanctions, as the delivery of parts of a Russian missile system is taking place, which has been sharply criticized by the US. We expect the Turkish Lira to weaken in the coming months against the USD.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD holds gains above 1.3150, US PCE inflation data looms

The GBP/USD pair recovers some lost ground to near 1.3175 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid UK political instability and rising expectations of US interest rate hikes this year. Traders await the US May Personal Consumption Expenditures inflation data on Thursday for fresh impetus.

EUR/USD rebounds above 1.1350, but outlook stays bearish below key resistance

The EUR/USD pair trades in positive territory around 1.1370. A surprisingly hawkish message from Kevin Warsh as the new Federal Reserve chair last week has traders pricing a US hike as soon as September. Markets might turn cautious later in the day ahead of the key US Personal Consumption Expenditures report.

Gold: Impending Death Cross hints at more downside

Gold is heading back toward seven-month lows near $3,950 early Thursday. The US Dollar enters bullish consolidation amid Fed rate hike bets, conflicting US-Iran messages. Gold could see further declines as RSI flirts with oversold territory, eyes on impending Death Cross.

Bitcoin tests $60,000 as whales sell off – Aave and Jupiter show resilience

The broader cryptocurrency market remains under intense selling pressure, with Bitcoin back at $60,000 for the third time this year. On-chain data shows selling pressure from large-wallet investors, commonly referred to as whales, while total liquidations hit nearly $1 billion in 24 hours.

Ripple and SBI Group partner to launch RLUSD in Japan

Ripple (XRP) remains under pressure, trading at $1.06 on Thursday after losing nearly 5% so far this week. Ripple and SBI Group partnered to launch RLUSD stablecoin in Japan following approval from the Japan Financial Services Agency on Thursday, but the move failed to lift sentiment.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.