Investing.com - The Turkish lira fell to a record low against the broadly stronger dollar on Thursday as the improving outlook for the U.S. economy sparked a renewed selloff in the currency.
USD/TRY rose to highs of 2.2118 and was last up 0.85% to 2.2098.
The dollar strengthened across the board after data released on Wednesday showed that manufacturing activity in the Empire State expanded at the fastest pace since May 2012 in January as new orders rose sharply.
A separate report showed that U.S. producer price inflation rose at the strongest rate in six months in December.
The strong data reinforced expectations that the U.S. economic recovery will continue to deepen going into this year and offset lingering concerns over last week’s surprising weak U.S. nonfarm payrolls report.
The selloff in the lira has been fuelled by the Federal Reserve’s December decision to cut its asset purchase program by USD10 billion, reducing it to USD75 billion-a-month.
Concerns over a corruption scandal surrounding Turkey''s ruling APK party also pressured the lira lower. The lira has fallen to a series of record lows since a wide ranging corruption probe was launched on December 17, resulting in the detention of several businessmen and the sons of three cabinet ministers.
The ongoing political volatility has fuelled investor concerns over the country’s external financial imbalances.
Data earlier in the week showed that the country’s current account deficit widened by the most in four months in November. The country’s central bank said the current account shortfall rose to USD3.9 billion from USD2.9 billion in October.
Elsewhere, the euro was close to record highs against the lira, with EUR/TRY advancing 0.87% to 3.0092, not far from the highs of 3.0156 reached on December 26.
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