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16 April 2014, Wednesday
 
 
Today's Zaman
 
 
 
 

Greenback touches 4-month-high TL 1.85 as shares suffer

(GRAPHIC: TODAY'S ZAMAN)
23 May 2012, Wednesday /TODAY'S ZAMAN WITH WIRES
The US dollar increased to TL 1.85 as shares traded on the İstanbul Stock Exchange (İMKB) continued a freefall Wednesday on worries that it is growing more likely that Greece will drop out of the eurozone at a time when differences between European leaders over how to tackle the current financial turmoil became sharper.

A dollar was TL 1.8482 early in the afternoon -- some 1 percent higher than it was a day earlier and the highest in the past four months -- whereas İMKB stocks lost 1.89 percent of their value on average at the end of the first trading session. The shares that upset their investors the most were Akmerkez Gayrimenkul (AKMGY) with 9.52 percent and Edip İplik (EDİP) with 6 percent losses in half a day.

Stocks elsewhere in Europe were no better than in Turkey. Benchmark indexes in Europe's three leading economies Germany, Britain and France -- the DAX, FTSE 100 and CAC-40, respectively -- were between 1.9 percent and 2.3 percent lower early in the afternoon compared to Tuesday's close.

Sentiment across the markets was also hit late on Tuesday when former Greek Prime Minister Lucas Papademos was quoted as saying Greece had no choice but to stick to a painful austerity program or face a damaging exit from the eurozone, a risk he said was unlikely to materialize but was real. The comments came after US markets had closed but knocked Asian shares, leaving the MSCI world equity index down around 0.8 percent.

Adding to investors' concerns, Dutch right-wing populist politician Geert Wilders, who aims to turn a Sept. 12 election into a referendum on the euro and EU membership, filed a lawsuit on Tuesday aimed at postponing the Dutch parliament's ratification of Europe's permanent bailout fund until after the vote.

Oil, likewise, fell to a seven-month low below $91 a barrel on Wednesday after Iran agreed to allow the UN nuclear agency to restart an investigation into the country's controversial nuclear program. By early afternoon in Europe, benchmark oil for July delivery was down 88 cents to $90.97 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.01 to settle at $91.85 in New York on Tuesday. In London, Brent crude for July delivery was down $1.30 at $107.11 per barrel on the ICE Futures exchange. The drops in oil prices, however, do not translate into reduction of fuel prices in Turkey because of the greenback's unstoppable rise ever since May 6 elections in Greece failed to produce a pro-bailout government for the debt-ridden country. A dollar was TL 1.76 on May 5.

Gold fell to as low as $1,555.03 an ounce (31.1 grams), extending sharp losses made in the previous session, on the growing skepticism that the informal European Union meeting later in the day would yield much. Gold has lost much of its safe-haven appeal to the dollar, US Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.

 
 
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