Published: Thu, August 16, 2018
Finance | By Loren Pratt

Turkey aims new tariffs at US as court rejects pastor's appeal

Turkey aims new tariffs at US as court rejects pastor's appeal

The dollar this week rose to a 13-month high against a basket of currencies, getting an extra boost as emerging markets have sold off on concern about contagion from Turkey and investors sought a safehaven in the USA currency.

While fears of a crisis in Turkey still loomed, China was in sharp focus as the yuan sagged almost 0.8 percent to 6.9514 per dollar, hitting its weakest level since January 2017.

Liberty Times that four major Taiwanese companies are likely to be on the losing end of investments and ventures in Turkey if the USA sanctions are implemented and maintained for any significant amount of time.

While the lira clung above record lows, tensions between Washington and Ankara remained on the boil, keeping the currency on a shaky footing.

In London, the FTSE 100 was down 0.4 per cent by Wednesday morning. It is now up more than 5 % this year.

"The risk is that the apparent calm in US markets may be giving USA investors a false read about how volatile the next few months might prove for global markets", Derrick said. "We see scope for that move to continue".

Hovenier said Washington expected the release of detained American citizens including Brunson "without delay" and "in a fair and transparent manner".

"Economists would certainly tell you that what is happening in Turkey goes far beyond the United States' recent policies and imposition of various policies", Nauert told a press briefing.

The pressure on Turkey is reflective of broader trends in emerging markets, although the lira is by far the worst performer.

The pan-European FTSEurofirst 300 index .FTEU3 lost 1.41 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.10 percent.

Yesterday, Indonesia's rupiah touched a near three-year low while China's yuan hovered around 15-month lows. That is also pressuring other Asian markets.

"China, the European Union and others have been manipulating their currencies and interest rates lower, while the United States is raising rates while the dollar gets stronger and stronger with each passing day - taking away our big competitive edge", Trump tweeted at that time.

The backdrop to all this is the escalation in global trade tensions, with Beijing lodging a complaint to the World Trade Organization to determine the legality of USA tariff and subsidy policies.

Turkish Vice President Fuat Oktay said that the tariff hikes were ordered "within the framework of reciprocity in retaliation for the conscious attacks on our economy by the USA administration".

The United States' top diplomat in Turkey, Jeffrey Hovenier, visited Brunson on Tuesday and called for his case - and those of others detained in Turkey - to be resolved "without delay" and in a "fair and transparent manner". A rise in SKEW indicates higher demand for protection against market falls. The dollar index slipped 0.1 percent to 96.613.

Investors stepped up safe-haven holdings of the USA dollar due to worries about China and Europe's exposure to Turkey, which pushed the euro to its weakest level in over a year.

Benchmark 10-year U.S. Treasury notes US10YT=RR last rose 9/32 in price to yield 2.8641 percent, from 2.895 percent late on Tuesday. The euro also struggled near a 13-month low versus the Swiss franc EURCHF=, a traditional safe-haven currency.

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