Turkish Lira Trades Lower as U.S.-Turkey Tensions Rise

Turkey’s currency is once again close to hitting new all-time lows against the dollar as tensions between the Trump and Erdogan administrations have ratcheted up.

The lira traded down 0.65% against the USD on Monday on comments from President Erdogan, who accused the Trump administration of waging a “psychological war” regarding the release of Pastor Andrew Brunson, an American who was arrested in Turkey in the aftermath of the failed coup in July of 2016.

President Erdogan’s accusation came in response to President Trump’s own threats of sanctions on Turkey:

The lira’s losses today small compared to the 3%+ daily crashes the lira suffered in the second week of July, however, today’s drop brings the lira closer to the 4.9734 level - the all-time low from July 12, 2018.

So far this year, and including Monday's losses, the lira has dropped approximately 29% versus the U.S. dollar:

American/Turkish flag image via Viktoria Pickering