Turkish Lira weakens to record low; Markets Monitor US GDP, Fed Minutes – Business Live | Business | Breaking News Updates

Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.

The Turkish lira weakened again this morning to a record low it hit yesterday against the dollar, after Turkish President Recep Tayyip Erdoğan signaled he would not be deterred by rising inflation further reduce interest rates.

The pound is down 2% against the dollar at 12.95 after closing at 12.7 on Tuesday when it fell to 13.45. It has lost over 40% of its value this year.

The Turkish president, who has declared himself an “enemy” of high borrowing costs, has defended the four percentage point cut in interest rates this year to 15%. He said it would boost investment, increase job prospects and boost economic growth.

However, as his unorthodox management of the economy was likely to discourage investment and raise inflation above the 20% level recorded in October, investors fled.

Some banks across the country halted foreign exchange transactions yesterday over concerns that the sharp drop in the value of the pound could trigger a drain in reserves, according to local newspaper reports.

There was also speculation that the government planned to impose strict capital controls to prevent further withdrawals if the economic situation worsened.

With the United States closed for the Thanksgiving holiday on Thursday, today we will have a tsunami of economic announcements, including the second estimate of third quarter GDP and culminating with the release of the Federal Reserve’s final minutes.

Michael Hewson, Chief Market Analyst at CMC Markets UK, says:

While the minutes aren’t likely to offer too many surprises, they could provide a decent snapshot of the FOMC’s deliberations into the decision-making process when it comes to deciding the amount of the initial cut. While the initial reduction in asset purchases was widely expected, an initial monthly reduction of $ 10 billion in treasury bills and $ 5 billion in mortgage-backed securities, it will be interesting to know how many members of the FOMC wanted to speed up.

This will be particularly relevant given that the committee was also divided over the rate hike next year, at its last meeting. We already know that a number of Fed officials are worried about the pace of price hikes, and there appears to be significant disagreement over the persistence of some of these price pressures. Today’s minutes could show where those divisions lie, with today’s economic numbers fueling the argument for a faster cut when the Fed meets next month.

Before that, we’ll see the latest revision of Q3 US GDP, which is expected to see a modest upward adjustment to 2.2% from 2%.

In Asia, stock markets were mixed, with the Japanese Nikkei falling 1.6% while the Hong Kong Hang Seng edged up 0.2%.

European stock markets are expected to open higher, providing some breathing space for German Dax who fell for four days amid a fourth wave of coronavirus infections, while the FTSE 100 index in London posted a modest gain for the second day of this week.

Agenda

• 9am GMT: Confidence of Ifo companies in Germany for November
• 11am GMT: British CBI industrial trends survey for November
• 1:30 p.m. GMT: Q3 US GDP (second estimate)
• 13:30 GMT: durable goods orders in the United States for October
• 13:30 GMT: Unemployment claims in the United States
• 14:30 GMT: UK Bank of England politician Silvana Tenreyro speaks
• 3 p.m. GMT: US personal consumption expenditure index for October (forecast: 4.1%)
• 7 p.m. GMT: minutes from the US Federal Reserve