Why is the Lira slipping

david9


Joined: 09/09/2008
Posts: 358

Message Posted:
28/12/2009 17:03

Can any genuises tell me why the Lira has slipped to 2.414 against the pound as of the last half hour?

paddywack


Joined: 04/05/2009
Posts: 959

Message Posted:
28/12/2009 17:19

Market forces.

andrew4232



Joined: 04/07/2009
Posts: 1543

Message Posted:
28/12/2009 17:20

the pound is weak and so is the lira

kaiserphil


Joined: 14/12/2008
Posts: 1096

Message Posted:
28/12/2009 17:21

fluctuations!

gooligan


Joined: 30/01/2007
Posts: 1591

Message Posted:
28/12/2009 17:26

It opened at 2.41 this morning and is now 2.415,it's hardly shifted all day.

malsancak


Joined: 23/08/2009
Posts: 2874

Message Posted:
28/12/2009 17:32

Because of UK's economic weaknesses, plus the uncertainty of the elections, the pound is on the verge of collapse against the Euro, and will probably reach parity with it in the near future. Some experts predict that it may drop below parity. The dollar is also looking to be a better bet, and many people are moving out of currencies into gold because of the confusion.

smithy


Joined: 17/07/2008
Posts: 5301

Message Posted:
28/12/2009 17:54

I just changed money and got 2.40 so going down again

winslow


Joined: 09/04/2009
Posts: 332

Message Posted:
28/12/2009 19:24

Msg 1

Read this will give a little idea its no TL strenght its more to do with pound weakness.....

http://www.telegraph.co.uk/finance/currency/6896334/Pound-could-soon-be-worth-less-than-euro-warns-CEBR.html.

Moover321


Joined: 11/04/2009
Posts: 649

Message Posted:
28/12/2009 19:46

Maybe the TL can't afford the better 'non-slip' sole (soul)...lol )

Moover321


Joined: 11/04/2009
Posts: 649

Message Posted:
28/12/2009 20:00

Okay - serious answer:



Exchange rates are subject to speculation. Part of this is based on what economists call 'the purchasing power of parity" PPP. In simple terms this theory states that in an ideal market (perfect competition) identical goods should have an equal value in terms of its price. Exchange rates fluctuate to this so called 'norm' in terms of the real exchange rates as opposed to nominal exchange rates.



Real exchange rates takes account of inflation, the fiscal policy, interest rates , savings and money supply.



The fact is that when markets believe that the currency is worth less than its current value they will 'sell' that currency and so it falls.



A country can adopt a policy of deliberately allowing its currency to fall i.e. USA at the moment so it reduces its deficits - makes imports more expensive and exports cheaper.



An educated guess would be 'speculators' see that inflation is rising in Turkey and so expect its PPP to fall and hence sell the TL

Moover321


Joined: 11/04/2009
Posts: 649

Message Posted:
28/12/2009 20:12

China has kept it currency artifically low - buy not allowing it to be traded openly.



The upshot is that Chineese exports are very competitive say comapred to the EU Zone or even the USA.



This is just one big game - and you me and the person next door just have to live with the 'system' we have!



If you want an accurate forecast for the TL the best way would to look at the 3 month, 6 month and 1 year value for the TL compared to its current 'spot rate'. If the slope is down i.e. looks like it's going to fall - you can either sell your TL's if you have TL's or if you want to buy TL's wait for the slope (trend) to flatten out.



Equally, if you are not sure - then sell (or buy) a little now...wait....sell (buy) more later...and then you can average out your gain or los



Hope this helps

Moover321


Joined: 11/04/2009
Posts: 649

Message Posted:
28/12/2009 20:22

* Just to make it clear - the PPP (Purchasing Power of Parity) is just a theory.



The reality is that finace is not a science but an art.



Mainly because the technical stuff is always reacting to the political dynamics.



That is why we have so much uncertainty and why markets become volatile.



When traders trade - they have a lot more information than you and me - and so they can make their 'play' long before us.



This is what we call speculation and the undderpinning of this is something called confidence.



That is why sometimes the values of currencies or values of shares etc., overshoot on the positive or negative. It takes time for markets to find an equilibrium.



Fact still remains, the system is deeply flawed and imperfect



That is why the rich and well connected politically, who can afford to speculate make a lot of money whether the markets go up or down



A bit confusing I know - but this is as simple as it gets

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
28/12/2009 20:32

Actually, if it has gone from 2.41 to 2.40 the lira has improved in value against sterling and is therefore sterling that has the problem.



That said, lira has been floating between 2.40 and 2.50 for a few months now and for me not a major issue.



If you are into currency speculation then these fluctuations will be of interest but as a casual watcher and very occasional exchanger best to just get the best at point in time you require the change.

Moover321


Joined: 11/04/2009
Posts: 649

Message Posted:
28/12/2009 20:42

Actually the best time to change will depend on a person's personal financial situation.



if it is a large purchase - say for a house - if you had the money in hand - and you knew the date you needed the currency then depending on the rate you can buy it and hold it - so you have fixed your price or wait and see what happens on the date you require the currency - or you can buy a little at a time 30%, 30%,30% and 10% - then you have averaged your exposure between the time you made a decision to buy your home or other purchase and the date of the final payment. remember - if it is going to be sometime - you will also have an interest rate factor for the money you hold in either TL or your home currency.



A rate that moves from 2.40 to / from 2.45 on £100,000 purchase will be a £2000 plus gain or loss. That would be 2% of your purchase price. Not exactly small change unless you have 'loads of money'



Enjoy

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
28/12/2009 20:49

Fair enough if you have that opportunity.



The point I make is that if you have to urgently change, for example if you are on holiday or urgent household expense then it is no use worrying about the exchange yesterday or what it changes to tomorrow.



As you imply, if or when I wish to change my pension it lira I hang on until best.

scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
28/12/2009 23:22

The lira has been far more stable against £ this year than any other year, since I've lived here - 8 yrs.

The lira isn't slipping, the £ is when the no. of lira you get for your pound falls.

Houses here are priced & sold in £s Sterling, so message 12 isn't really relevant unless all your funds are in lira.

david9


Joined: 09/09/2008
Posts: 358

Message Posted:
29/12/2009 09:06

Thanks for all the replies

LOvegod


Joined: 22/03/2009
Posts: 161

Message Posted:
29/12/2009 18:40

correct scruff. sterling is falling now against the lira. so holding lira at say 7.5% int makes good sense. In my humble opinion the pound will probably suffer a 10 % fall against the dollar this year making it the financial whipping boy for 2010.