Cyprus-Forum.com

[Maximus]

A picture speaks a thousand words



Turkeys economy has been seriously under performing vs the EU as of late. The blue horizontal line at Lira 2.35 to the Euro marks off a major pivot area going back to the recent historical highs of march 2009. In both June and July of this year, this price area managed to provide minor resistance to the upward move at point 'A'. the demand for Lira did not present itself to the markets like it did back in march of 2009, then after, a significant strengthening of the Lira ensued which lasted for about 1.5 years.

The trend has been establish (green line) for just over a year now and the rate of exchange broke through the key pivot area at 'B' with relative ease. prices above Lira 2.35 to the euro can now really be considered long term bullish. The market has reacted temporarily and the euro has started to sell off due to Turkeys central bank intervening to prevent further declines.

Turkey’s central bank sold $350 million for liras in an auction, selling about a quarter of the $1.35 billion it said it may offer. The central bank in Ankara got $2.04 billion of bids in the auction, the most since the daily auctions began on Aug. 5, according to data published on the bank’s website today.Governor Erdem Basci sold $750 million yesterday, a record amount for such a sale, as it sought to defend the currency after it fell to a record low of 1.9096 on Aug. 4. The lira pared earlier gains, rising 1.1 percent to 1.8478 per dollar at 2:25 p.m. in Istanbul. Today’s sale equals the amount sold on Sept. 20., the day after the lira declined to 1.8 per dollar
http://www.businessweek.com/news/2011-1 ... -bids.html

This does not seem like it will be enough to save the Lira. the yearly upward trend line (green line) where natural demand for euros has consistently presented itself can once again come into play and resume the existing trend. this is the present time.

where to from here? from a technical perspective the euro has great potential to get much stronger. If the yearly upward trend line holds then we can expect a further depreciation of the Lira as the market rallies to tests supply again at the highs, 'C'. The yearly trend line (green) can fail, followed by a further depreciation of the euro, if only temporarily. Lira longs will likely run into resistance at the major pivot area of 2.35 at 'D'. euro bulls are firmly in control of this market and 2.35 is a relative bargain to buy again. if the 2.35 price area fails to hold then the lira has a chance of a real comeback, but my money is on the long side, sell Lira, buy euro and hold for even higher prices.

[Jerry]

Could a crisis in the Turkish economy force that country to pursue its EU application more vigourously. It may see stronger linkage to Europe as the only way to convince the markets that it's a country worth investing in. When Greece defaults it will almost certainly have to abandon the Euro and, according to experts, it will then have to quit the EU. Turkey would then wish to "trump" its traditional enemy by getting into the EU as quickly as possible. The problem is it will have to give up Cyprus first.

Here's what the CIA have to say about the Turkish economy and the EU :-

The stock value of FDI stood at $174 billion at year-end 2010, but inflows have slowed considerably in light of continuing economic turmoil in Europe, the source of much of Turkey's FDI. Further economic and judicial reforms and prospective EU membership are expected to boost Turkey's attractiveness to foreign investors. However, Turkey's relatively high current account deficit, uncertainty related to policy-making, and fiscal imbalances leave the economy vulnerable to destabilizing shifts in investor confidence.
https://www.cia.gov/library/publication ... os/tu.html

[boulio]

If Greece left the euro why would in need to leave the eu?

[Hermes]

Could a crisis in the Turkish economy force that country to pursue its EU application more vigourously. It may see stronger linkage to Europe as the only way to convince the markets that it's a country worth investing in. When Greece defaults it will almost certainly have to abandon the Euro and, according to experts, it will then have to quit the EU. Turkey would then wish to "trump" its traditional enemy by getting into the EU as quickly as possible. The problem is it will have to give up Cyprus first.

Any Greek default is likely to be controlled and there is not much inclination amongst Greek policymakers to return to the drachma. Or for Greece to quit the EU. I don't disagree with the rest of the quote about an imploding Turkish economy forcing a rethink about Turkey's commitment to EU accession. But Turkey isn't exactly behaving as if that's an option right now...

[Maximus]

For the past year, noone was buying Turkey but there was a lot of interest in the euro. prevention is always better than cure but you need to be diagnosed with some kind of illness before you can even learn about it and concieve a cure. Turkey would be greatful to receive the kind of support which has been given to Greece and i dont believe Greece would think about quiting the EU, not now, it would be like selling out at the bottom, just before a major turn.

Alex Taylor: “Where do you see the euro in 10 years? It’s a question a lot of people are asking.”
Jose Manuel Barroso : “Stronger of course. So far, many members want to join the euro, no one wants to quit the euro.”

http://www.euronews.net/2011/10/06/barr ... questions/

[Jerry]

If Greece left the euro why would in need to leave the eu?

In a discussion on BBC Newsnight about the Greek debt crisis the experts were quite clear that if Greece leaves the Euro it would also have to leave the EU.

[CBBB]

If Greece left the euro why would in need to leave the eu?

In a discussion on BBC Newsnight about the Greek debt crisis the experts were quite clear that if Greece leaves the Euro it would also have to leave the EU.

Why? Plenty of countries in the EU that don't have and don't want the Euro.

[Jerry]

If Greece left the euro why would in need to leave the eu?

In a discussion on BBC Newsnight about the Greek debt crisis the experts were quite clear that if Greece leaves the Euro it would also have to leave the EU.

Why? Plenty of countries in the EU that don't have and don't want the Euro.

Don't ask me, ask the experts. It's one thing not joining the euro in the first place as the UK has done but apparently leaving the euro is an entirely different matter.

[CBBB]

If Greece left the euro why would in need to leave the eu?

In a discussion on BBC Newsnight about the Greek debt crisis the experts were quite clear that if Greece leaves the Euro it would also have to leave the EU.

Why? Plenty of countries in the EU that don't have and don't want the Euro.

Don't ask me, ask the experts. It's one thing not joining the euro in the first place as the UK has done but apparently leaving the euro is an entirely different matter.

Which edition of Newsnight was this in?

[Capt J Sparrow]

If Greece left the euro why would in need to leave the eu?

In a discussion on BBC Newsnight about the Greek debt crisis the experts were quite clear that if Greece leaves the Euro it would also have to leave the EU.

Why? Plenty of countries in the EU that don't have and don't want the Euro.

Don't ask me, ask the experts. It's one thing not joining the euro in the first place as the UK has done but apparently leaving the euro is an entirely different matter.

Other 'experts' were also saying that Greece can't leave the Euro, because if it did, Greece will never recover since all its debt is in Euros. If it goes back to the Drachma, then it will never pay off its debt because the Drachma will continue to devalue and paying off its Euro debt with a devalued Drachma will be like shoveling shit uphill.

So apparently, Greece going back to the Drachma isn't a viable option according to some 'experts'.