The sharp fall in the lira continues, USD/TRY now up to 5.7300

I'm struggling to keep up with the move really. It was just 5.6600 a couple of minutes ago as I was trying to take a snapshot of the chart. A quick jolt higher now in the pair as the lira continues to fall.

The ECB is said to be concerned about banks' credit exposure to Turkey as the lira continues to depreciate and headlines like that isn't going to help with risk sentiment as a whole really.

All eyes are now on Erdogan's speech that is to come later on but he is likely to provide some reassurance to relieve the pressure although how that translates into actions remains doubtful. Erdogan is one not in favour of drastic rate hikes and/or capital controls, two things which the lira could really do with right now.

Unless one of those two actions are taken, it's wishful thinking to believe the lira would pull off any sustained retracement/rebound as long as the backdrop remains the same - possible sanctions by the US.