Turkish shares, lira open higher following dovish remarks from Fed

DAILY SABAH WITH WIRES
ISTANBUL
Published 18.08.2016 21:44

Turkish stocks opened higher yesterday after the latest meeting minutes of the U.S. Federal Reserve (FOMC) did not contain an explicit reference to the timing of the next rate hike. Also, the Turkish lira started yesterday exchanging at 2.9130 against the dollar, up from 2.9240 on Wednesday. Towards Borsa Istanbul's closing session, the Turkish lira was being traded at below 2.93, preserving its strength against the dollar.

Borsa Istanbul's BIST-100, the country's benchmark index, was up 0.71 percent (558.72 points) reaching 78,706.54 at the opening of the daily session yesterday, after rising 0.57 percent Wednesday.

The minutes of the Fed's July meeting Wednesday showed that nine of the 10 Federal Open Market Committee members wanted to hold a rate hike last month but officials were mostly divided about when to implement it. According to experts, it is unlikely the Federal Reserve will raise its benchmark interest rate at its meeting on September, after minutes from July revealed dovish remarks by bank officials.

Moreover, the dollar fell to a seven-week low against a basket of major currencies yesterday, after the minutes showing members of the rate-setting Federal Open Market Committee were generally upbeat about the U.S. economic outlook. The dollar index fell as low as 94.324, its weakest since June 24, in the European session, later edging back to 94.460 but still down 1.3 percent this week.

The euro was 0.25 percent higher at $1.1315, having hit a seven-week high of $1.1332. The dollar eked out gains against the yen, with traders cautious about pushing the Japanese currency much higher amid expectations that the Bank of Japan could intervene. The dollar was trading 0.15 percent higher at 100.37 yen, having hit a seven-week low of 99.55 yen on Tuesday.

Sterling rose nearly 1 percent to a two-week high of $1.3173 after UK retail sales for July beat forecasts, apparently unaffected by Britain's vote to leave the European Union.

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