The EUR to TRY exchange rate has experienced upward momentum, reaching 90-day highs near 47.03, which is approximately 5.4% above its three-month average of 44.62. Analysts attribute this rise to heightened volatility in both currency and commodity markets, with the EUR/TRY trading within a steep range of 10.7% from 42.47 to 47.03.
Recent developments in the Eurozone, particularly the uncertainty surrounding the EU-US trade negotiations, have negatively impacted the euro. Division among EU members regarding the trade deal terms, coupled with a significant decline in Eurozone retail sales, has raised concerns among investors. Furthermore, persistent inflation rates and indications from the European Central Bank (ECB) about a possible pause in interest rate hikes contribute to a mixed outlook for the euro's strength.
Geopolitical tensions, including the ongoing war in Ukraine and the resultant economic challenges for the Eurozone, have added to the euro's volatility. The potential for economic stagnation, especially as a result of a slowdown in GDP growth, may further suppress investor confidence in the euro.
In contrast, the Turkish lira (TRY) faces substantial pressures amid political turmoil, particularly following the arrest of Istanbul's mayor, Ekrem İmamoğlu. This situation has exacerbated instability in Turkish markets, leading the lira to a record low against the dollar. Concerns surrounding President Erdoğan's commitment to economic reforms have further shaken investor confidence.
Compounding these issues is the ongoing impact of global oil prices on the EUR/TRY rate. The recent rise in oil prices to USD 70.19, which is 4.8% above its three-month average, has implications for the Turkish economy, heavily influenced by energy costs.
Economists and market analysts suggest that the euro may find support should the EU manage to navigate a successful trade deal, while the Turkish lira's prospects are closely tied to both domestic political stability and external economic factors, particularly relations with major trade partners. Staying informed about these developments is crucial for individuals and businesses engaging in international transactions involving EUR and TRY.