The Turkish lira lost ground for the third consecutive day yesterday, dropping off to 3-week lows against sterling. The weakness came in response to comments from the Turkish Economic Minister Nihat Zeybekci, who suggested that inflation will fall to around 6 per cent by the end of the year. If such a forecast is realised, it would put significant pressure on policy-makers to look to an interest rate cut later in the year. Conversely, the Australian dollar strengthened ahead of inflation figures released early this morning. Throughout the day yesterday, economists were forecasting the figures would show a rise in inflation rates, which would fuel speculation of an interest rate hike in the near future as the Australian economy continues with its strong start to 2014. Elsewhere, the Swedish krona had a strong day, whereas the Indian rupee and South African rand struggled.
Looking forward to today, we have an interest rate decision from New Zealand, retail sales data out of Canada, and economic health data from the Chinese manufacturing industry.
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