- USD/TRY pulled back from its record high of 41.70, reached during early European trading on Wednesday.
- Political risks in Turkey intensified as Istanbul Mayor Ekrem Imamoglu was detained this morning.
- President Trump dismissed two Democratic Federal Trade Commission (FTC) commissioners.
USD/TRY retreats from its record high of 41.70, reached during early European trading hours on Wednesday, hovering around 38.70 at the time of writing. The pair surged as the Turkish Lira weakened sharply amid escalating political risks in Turkey.
State broadcaster TRT, citing the Istanbul Prosecutor’s Office, reported that Istanbul Mayor Ekrem Imamoglu, President Recep Tayyip Erdogan’s main political rival, was detained this morning as part of corruption and terror investigations.
Additionally, the state-run Anadolu Agency stated that detention orders were issued for approximately 100 others linked to Imamoglu, including his press adviser Murat Ongun, who was expected to be the Republican People’s Party (CHP) presidential candidate. This move is widely seen as Erdogan consolidating his power by sidelining potential challengers, causing turbulence in Turkish financial markets.
Meanwhile, the USD/TRY pair also gains support from a strengthening US Dollar (USD), backed by stable Treasury yields as investors await the Federal Reserve’s (Fed) interest rate decision later in the day. The Fed is expected to keep rates steady amid persistent inflation concerns and economic uncertainty. Traders are watching the Fed’s updated economic projections for clues on future US interest rate policy. Any hawkish signals could further bolster the USD against its peers.
Additionally, the Wall Street Journal reports that US President Donald Trump has dismissed two Democratic Federal Trade Commission (FTC) commissioners. However, questions remain over his authority to do so, sparking speculation about whether this move sets a precedent for potential dismissals of Federal Reserve (Fed) Chair Jerome Powell and other Federal Reserve members.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
BRANDED CONTENT
Finding a broker with low spreads can make a big difference in your trading success. Discover our top picks for low-spread brokers, each offering unique benefits to fit your strategy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays pressured near 1.1350 on USD rebound
EUR/USD trades in negative territory at around 1.1350 on Friday. Renewed US Dollar strength on growing optimism surrounding the US-China trade war de-escalation keeps the pair undermined. Trade talks and US data remain in focus.
GBP/USD consolidates losses near 1.3300 after UK Retail Sales data
GBP/USD remains under moderate selling pressure near 1.3300 despite the upbeat UK Retail Sales data for March. The pair feels the heat of the solid US Dollar rebound, aided by a Bloomberg report, which indicated China may suspend its 125% tariff on select US imports.
Gold drops below $3,300 as market mood improves
Gold turns south following Thursday's rebound and trades below $3,300 on Friday. The move down comes amid growing optimism about a de-escalation of the US-China trade conflict after US President Trump hinted at the beginning of negotiations.
Ethereum: Accumulation addresses grab 1.11 million ETH as bullish momentum rises
Ethereum saw a 1% decline on Friday as sellers dominated exchange activity in the past 24 hours. Despite the recent selling, increased inflows into accumulation addresses and declining net taker volume show a gradual return of bullish momentum.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.