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Turkey’s central bank raised its key interest rates by a whopping 475 basis points to 15 percent on Thursday soon after President Recep Tayyip Erdogan hired a new governor for the bank to initiate a new economic approach to the coronavirus. The move is projected to push the emerging market’s lira against its bigger counterparts after its policy committee said that the tightening would help lower its current double-digit inflation, which could stop the impending bearish trend in its currency market. The bank proclaimed that it will sustain these levels until it achieves a permanent fall in inflation. As the eurozone continues its struggle towards the deadline for its trade agreement with the United Kingdom, the euro is more likely to fall in the near-term. Poland and Hungary have also put its current recovery package hostage, which markets claim will lead to the bloc’s double-dip economic contraction after it only began recovering.
Retail sales in Australia rebounded by 1.6 percent in October in comparison to the month prior. The preliminary data is projected to help its currency to increase over hopes of an improving economy, now that it managed to eliminate much of its second outbreak of coronavirus cases in most Australian states. The reopening of retail stores in Victoria will help keep the lead through the quarter if the disease keeps its head low. Fortunately, the market is expecting a surge in sales during Black Friday, and the recent pick-up in consumer confidence should keep prices elevated throughout the holidays. Low interest rates and the record savings buffer should keep consumption going upward in the next quarter despite the total fiscal stimulus of 300 billion Aussie dollars since March. Meanwhile, the Brexit transition deadline is only within a few weeks. Sterling is projected to drop in the near-term due to economists’ worries that its economy would struggle with no deals.
It’s going to be a quiet day in the US economic calendar, tilting the focus towards the recent decision from Treasury Secretary Steven Mnunchin to pull the plug on funding for emergency Federal Reserve programs that were initially intended to help buoy businesses from collapsing during the pandemic. Mnuchin asked the Fed to return some of the 455 billion US dollars that were left unused for programs that were set to expire by the end of the year, which would then be repurposed for other practices. However, daily coronavirus cases just recorded a new daily high this week. In fact, Thursday alone had seen only 300 less than 185,000 new infections in one day, which beat the previous record of 177,224. The market is projected to turn away from the greenback in favor of its opposites over near-term worries, which is likely to end only in January when a new president has finally been inaugurated.
Scientists claim that the nationwide lockdown in the United Kingdom isn’t likely to end around Christmas. However, the market is projected to make the most of cases plateauing, which could go down slowly. The decrease has been significantly linked to their recent lockdown measures. They now expect the total cases to drop within four weeks’ time, now that the City has clear evidence that tier 3 measures were working to help suppress a much bigger wave than it currently has. This means that if the UK does finally reach a concrete agreement on key talks with the European Union regarding its exit, its economy may be well on track towards a better recovery than initially anticipated. Meanwhile, the Reserve Bank of New Zealand said that it’s planning to hold its interest rates at its record low until March 2021, all while its new funding-for-lending program would reduce costs for lenders. Sterling will be more likely to rise.
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