January and February are characterised by unexpected dramas.
Jan – ok till 22nd then 13% decline, almost all
reversed a week later ( rate rise), but then settled at about 6% decline for
month
The instability remains throughout the period.
Although there may be fluctuations in value in both
directions, the overall mood is likely to be negative again.
I wouldn’t rule out another interest rate change.
Although the themes continue into May and June, there is
less of a feeling of direct pressure. Now it is more likely that volatility is
larger but with less downward pressure. Indeed there might be a rapid reversal
in June.
It is more of the same in July and August. But again with
less clear direction. Although there is no sign of a lifting of the
uncertainty.
Late August though sees a slight change in sentiment
September and October suggest less uncertainty ( at least temporarily) and
more direction to trade.
There is still volatility, but there is, on balance, a more
positive mood now and this might lead to an up-tick in value, although it is
unlikely to be large in comparison to the broader trend.
November and December, however, see some relief from the pressures,
a more positive mood and perhaps some recovery in value for the Lira.
It is a brief respite though as 2015 begins with many of the
themes of 2014 continuing. There is still uncertainty, still volatility and
still pressure on values.
However the situation is not as bad as before and there are
signs that the balance might even be positive by the end of February. There is
definite support at this level.
March and April see things all over the place again though.
But May to August, while not signifying a turnaround in
sentiment. At least sees enough positive momentum to create a rise in value and
indeed some volume of trade in that direction.
September and October see a return to earlier conditions,
and inflationary concerns. Will lead once again to volatility.
Fortunately it settles down towards the latter part of these
two months as a new environment is being created.
The new situation starts to take its form in November and
December but there is still, inevitably, some uncertainty surrounding how it
will play out.
This will briefly lead to more of the old instability and
volatility.
2016
January and February sees some stabilising influence brought
into play to offset the dramas.
March and April sees the country adjusting to the new
conditions, perhaps with some difficulties but without the same levels of
uncertainty and volatility that have been seen in the last 3 years.
May and June are tricky and perhaps somewhat more volatile.
There is less in the way of stabilising influences. However there is a
continued optimism that the situation is beginning to settle down.
July is likely to see more of the same themes but August sees
the currency finally starting to emerge from the tunnel.
Indeed August is a very positive month for the currency.
Although the difficulties are fresh in minds and will prevent any rapid rises.
September and October are more mixed but again much more
positive.
A much better
position is reached.
The final stage in the stabilising process that started a
year ago falls into place in November and December. Whilst there are still long
term issues to be resolved and whilst there is a mix of positive and negative
views the good thing is the reduction in volatility and uncertainty.
There may be rate changes and other minor policy adjustments
that affect value but the overall situation is much better now.
Picture
Not an art work, just a photo of one of my favourite hotels in the word
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