Jan 31 2019

Citigroup adds to Turkish lira positions

U.S. bank Citigroup added to its positions in Turkish lira saying the currency stood to benefit from lower bond yields in the United States.

Citigroup increased its holdings of lira by 1 percent, emerging markets strategist Luis Costa said in comments to investors, according to Reuters.

“It feels like the exact inverse of Q3 last year when U.S. monetary and financial conditions were flirting with a more pronounced tightening," Costa said.

Currencies in central Europe, the Middle East and Africa – a region known as CEMEA, looked attractive in the current environment, he said.

The lira fell 0.5 percent to 5.198 per dollar at 3:22 p.m. in Istanbul, paring this year’s gains to 1.7 percent. The currency hit a record low of 7.22 per dollar in August, when concerns about an overheating economy were exacerbated by a political crisis with the United States.

The lira began trading in 2018 at 3.75 per dollar.

Citigroup said it was also shorting the dollar versus the South African rand and is long in the Russian rouble versus a half-dollar, half-euro basket.

https://www.reuters.com/article/uk-emerging-markets-currencies-citi/citi-time-to-add-to-em-fx-risk-focus-on-ceemea-high-yielders-idUSKCN1PP15G