USDTRY dropped after Trump Speech
On 23 October, US President Trump announced that the United States will lift sanctions against Turkey because of a “permanent” ceasefire agreement between Turkey and Kurdish armed groups. After the news came, the Turkish lira, ETF and government bonds rose.
Turkey invaded northern Syria earlier this month, and Trump said Turkey’s ceasefire in the region is “permanent”. Trump said at the White House: “Unless something that we are not satisfied with, the sanctions will be lifted.” Trump said that the ceasefire in Syria has remained very good, and Turkey told the United States that they will permanently cease-fire. If Turkey fails to implement the agreement, sanctions will be re-applied, including tariffs on steel and other products. Trump said: “Let someone else fight over this long-bloodstained sand”.
President Trump also pointed out that small-scale US troops will still be maintained in the region (areas with crude oil) and will decide how to deal with crude oil in the future. Trump said that Turkish President Erdogan has done the right thing for his country and he will meet Erdogan shortly.
Donald Trump used this speech to respond to criticisms, even from members of his party. Their decision to withdraw US troops from northern Syria was considered as a major geopolitical mistake. It would allow the United States to abandon its allies and hand over its territory and influence to the regional enemy. He said: “Today’s announcement confirmed to Turkey the actions we took. Just a few weeks ago, Turkey also sneered at our actions. Now, people say, wow, what a great achievement, congratulations.”
After the news of the lifting of the sanctions, the Turkish lira soared against the US dollar in a short-term. Therefore, the US dollar depreciates against the Turkish lira. Now the USDTRY is 5.72759. Also, the IShares Turkey ETF rose to 3.6%. Turkish government bonds rose.
