The Central Bank of the Republic of Turkey has hiked rates, the benchmark overnight lending rate from 7.75% to 12%, which was right out at the upper end of expectations – a very aggressive move.
The market has taken this as a very positive for ‘risk':
- AUD higher
- NZD higher
- USD/JPY higher
- USD/CHF higher
The move by the Turkish central bank most likely makes the decision to further ‘taper’ an easier on for the FOMC tomorrow. Maybe that is a positive for risk? The market reactions seems to be saying it is… but maybe we will see some selling into this ‘risk rally’ as we approach some of the shorter-term resistance levels (a quick glance at the charts put these around overnight highs approx. 0.8290 in NZD, 0.8815 in AUD)?
