Turkish lira rallies against dollar on rising risk appetite

• The lira, which has been trading near its weakest ever levels reached during a currency crisis in 2018, firmed as far as 6.83 against the US currency before easing back to 6.8730 by 1146 GMT.
• Emerging markets were helped by increased signs that the United States would soon emerge from coronavirus lockdown.

ISTANBUL: The Turkish lira strengthened as much as 1.6pc against the dollar on Friday as a rise in risk appetite in emerging markets helped it recoup some of its losses this week driven by concerns about the economic impact of the coronavirus epidemic.

The lira, which has been trading near its weakest ever levels reached during a currency crisis in 2018, firmed as far as 6.83 against the US currency before easing back to 6.8730 by 1146 GMT.

Emerging markets were helped by increased signs that the United States would soon emerge from coronavirus lockdown.

"Emerging market currencies have made a late reaction to the optimism in European markets," said one forex trader, adding that concerns about foreign financing had added to selling pressure on the lira this week.

"This selling pressure reversed today under the impact of the general optimism in emerging markets," he said.

At current levels, the lira was still 13pc weaker than at the end of last year. At the peak of the crisis in mid-August 2018, it had tumbled as far as 7.24.