Turkish Lira has plunged with 8 percent loss against US dollar in 7 seven minutes due to an unprecedented surge of yen when the markets are closed. Many believe that, investors harshly moved to yen’s safe haven and triggered an abrupt fluctuation as a reaction to Apple Inc.’s cutting sales outlook.
In those wild minutes from about 01.30 a.m. Turkey, the Turkish Lira plummeted almost 10 percent against to Japanese yen, and 8 percent to US dollar. Australian dollar was another currency which was hit most by the instant surge of yen.
Traders across Asia and Europe are still seeking to piece together what happened in those minutes when orders flooded in to sell Australia’s dollar and Turkey’s lira against the yen. Beside Apple’s sales cut outlook effect, whatever the cause, the moves were exacerbated by algorithmic programs and thin liquidity with Japan on holiday.
That hasn’t stopped investors in Japan from piling into foreign currencies as the central bank’s negative-interest-rate policy made the yen a source of cheap funding. Individuals boosted their net Aussie long positions by 45 percent in last two weeks of 2018. These retail accounts’ net Turkish lira long positions were also at a four-month high.
After the markets opening, Turkish Lira has steadily gained its value against US dollar and trading around 5.49 TL to USD with a slight loss of 1.69 percent at 2 p.m. in Turkey.