Welcome to the new forex week from Asia and the big news that the Turkish president sacked the governor of the central bank over the weekend.
The Turkish lira has been trashed ... from earlier:
- Long lira had become a popular trade when the new governor was appointed 4 months ago - Agbal was hiking to fight inflation and to try to restore credibility to the central bank. Lira bulls had expected rate to rise further and were comfortable being long. That's shot to pieces now.
- More: Turkish lira has opened (in super-thin trade) much lower after central bank head sacked
Overflow into major FX was characterised by flows to yen and the USD:
How long can a minor EM issue impact major FX? Not too long. USD/JPY has now covered its gap.
TRY remains heavy though:
