Breaking News

Turkey Contagion Hits Europe

By Fiona CincottaMarket OverviewAug 10, 2018 14:06
Turkey Contagion Hits Europe
By Fiona Cincotta   |  Aug 10, 2018 14:06
Saved. See Saved Items.
This article has already been saved in your Saved Items

The FTSE opened lower this morning catching the contagion from a free-fall in the Turkish lira and the Russian rouble which are affecting the euro, banking stocks and large Russian London-listed companies.

The Turkish lira went into a free-fall overnight, declining by more than 10% to trade at around 6 against the dollar, as the country teeters on the edge of a balance of payment crisis and faces political pressure from Washington over the detention of a US pastor. The move was further exaggerated by reports that the European Central Bank is increasingly worried about the exposure of European banks to Turkey.

The turmoil in the currency market didn’t stop there. Asian markets declined, most prominently the Nikkei which fell 1.3% and European bourses all opened lower as investors started ditching higher risk assets to look for safe haven buys such as US bonds. The euro hit the lowest level against the dollar in over a year.

Rouble, rouble

In London, shares in Russian steel maker Evraz plunged 7.42% as the latest set of US sanctions against Russia are beginning to bite. The US said Thursday it would penalise Russia for its involvement in the attempt on the life of its former spy Sergei Skripal with a new set of trade restrictions causing the rouble to tumble and Russian companies to be sold off on Western markets. Other miners were also under pressure as gold and copper prices dropped overnight. Anglo-South African gold producer Anglo American (LON:AAL), Chilean copper miner Antofagasta (LON:ANTO) and gold producer Rangold are all trading between 2.35% and 2.68% lower.

House of Fraser in administration

A number of retail chains have gone into administration this year including the likes of Carpetright and Mothercare, with Homebase struggling to avoid this fate. On Friday upmarket retailer House of Fraser joined the sorry line-up saying that it has appointed administrators after giving up the fight to save the business. HoF’s reasons for closure are the same as for the less glamourous labels – competition from internet sales, too many stores and not enough physical visitors. The company’s future now lies in the hands of administrators Ernst & Young who are trying to find a buyer to save the struggling chain.

"Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Original post

Turkey Contagion Hits Europe
Turkey Contagion Hits Europe

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email