The Turkish lira is surging

Turkish lira is spiking.

The currency is stronger by 1.2% at 3.0317 per dollar as of 7:31 a.m. ET.

Last week, the lira fell to a record low against the dollar after S&P downgraded Turkey.

“Following the attempted coup in the Republic of Turkey on July 15, we believe the polarization of Turkey’s political landscape has further eroded its institutional checks and balances,” the S&P noted.

“In addition, we expect a period of heightened unpredictability that could constrain capital inflows into Turkey’s externally leveraged economy,”

Separately, EU Commission President Jean-Claude Juncker said on Monday that Turkey “is not in a position to become a member [of the European Union] anytime soon and not even over a longer period.”

“He said that a country that included the death penalty in its legislative arsenal had no place in the European Union,” Reuters reports.

As for the rest of the world, here’s the scoreboard:

  • The euro is little changed for the day at 1.0985 against the dollar after the latest data from the Ifo Institute showed that business confidence in Germany slipped to 108.3 in July. That reading is above the expected 107.7, but showed “far less optimistic business expectations on the part of companies” after the UK’s decision to leave the European Union.
  • The British pound is little changed at 1.3129 against the dollar. In other UK news, newly named Conservative Party Chairman Patrick McLoughlin says Article 50, which formally starts the UK’s exit from Europe, will be triggered before the 2020 election.
  • The US dollar index is little changed at 97.35 ahead of a quiet data day. Dallas Fed manufacturing activity will be out at 9:45 a.m. ET.
  • The Canadian dollar is weaker by 0.4% at 1.3176 per the dollar.
  • The Japanese yen is little changed at 106.27 per dollar.

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