Reuters dollar/TRY survey released: Year-end expectation revealed

In a survey conducted by Reuters, emerging market currencies are expected to trade in narrow ranges and lose their year-to-date gains after expectations for aggressive interest rate cuts by the US Federal Reserve (Fed) weakened.

The survey projects that the losses of the Turkish lira against the dollar will reach 5 percent by the end of the year.

According to the median of the TRY forecasts in the Reuters survey on emerging market currencies, the dollar/TRY exchange rate is expected to be 34.6267 in one month, 36 at the end of the year, 37.67 in six months, and 41.25 in 12 months.

Emerging market currencies, which experienced significant losses last year and in the first half of this year, had gained value against the dollar after the Fed cut its policy rate by 50 basis points.

However, after Fed Chair Jerome Powell signaled that the Fed would proceed with 25 basis point cuts in future interest rate decisions, these currencies are nearing the end of their rally.

Escalating geopolitical tensions have driven investors toward the dollar, which they view as a safe haven, causing them to move away from emerging markets that are more vulnerable to risks.

The Chinese yuan, Thai baht, and Malaysian ringgit are expected to lose between 1.2 percent and 2.0 percent of their value against the dollar by the end of the year, while the Indian rupee is expected to trade at 83.73 by year-end.

The South African rand is expected to lose 1 percent of its value by the end of the year, following an 8 percent gain after the elections in May.

News Source: 12punto