August 14, 2018 / 3:17 PM / 8 months ago

FOREX-Euro slips on Turkey angst, dollar holds firm

    * Euro holds above 13-month lows vs dollar, Swiss franc
    * Turkish lira rebounds from record low but concerns persist
    * Dollar hovers below 13-month peak on safe-haven demand
    * Graphic: World FX rates in 2018

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Aug 14 (Reuters) - The euro fell on Tuesday,
hitting 13-month lows against the dollar and Swiss franc, as
traders fret over the exposure of European banks to Turkey,
whose currency rebounded from an all-time low.
    The Turkish lira has lost more than 40 percent
of its value against the dollar this year, hit by worries over
President Tayyip Erdogan's calls for lower interest rates and
fraying ties with the United States..
    On Tuesday, however, the lira recovered some ground, trading
at 6.4350 to the dollar at 1451 GMT, up 6.7 percent on the day,
after plunging to an all-time low of 7.24 on Monday.
    Sanctions imposed by Washington on Ankara have stoked
anxiety about Turkey's economy, which is already bogged down by
double-digit inflation.
    The currency was supported by Turkish finance minister Berat
Albayrak's remarks at a news conference, where he said the lira
will strengthen.
    "I don't believe it's all over," said Minh Trang, senior
currency trader at Silicon Valley Bank in Santa Clara,
California. "We are just getting a bit of reprieve from the
recent down move."
    Concerns have lingered about European banks' loans to
Turkey, stoking selling of regional stocks and the single
currency, analysts said.
    The euro was down nearly 0.3 percent at $1.13770
after touching a 13-month low at 1.13650 on Monday. 
    The common currency touched a 13-month low at 1.12700 Swiss
franc before moving to $1.12875, down 0.3 percent
on the day, according to EBS data.
    The euro held above a 10-plus week low against
the yen reached on Monday. It was last down 0.1 percent at
126.15 yen per euro.
    The lira's bounce on Tuesday bolstered other emerging market
currencies that were slammed by fears about Turkey's economic
woes spreading.
    The South African rand rose 1.4 percent, while the
Indian rupee recovered from an all-time low.
    Investors remain nervous about a renewed plunge in the lira,
prompting capital outflows from other emerging markets that run
hefty current account deficits and rely on foreign capital.     
    Until the crisis in Turkey is over, "risk aversion is likely
to remain elevated, which will continue to benefit mainly the
currency safe havens," said Antje Praefcke, a currency
strategist at Commerzbank in Frankfurt.    
    Investors have raised their safe-haven holdings of the
dollar as a result of the lira crisis.
    An index that tracks the greenback versus a basket of other 
currencies was steady at 96.414, below a 13-month peak of
96.522 reached on Monday. 
    Currency bid prices at 10:56AM (1456 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1378        $1.1408     -0.26%         -5.15%      +1.1429     +1.1377
 Dollar/Yen       JPY=        110.8800       110.7100    +0.15%         -1.59%      +111.1400   +110.5900
 Euro/Yen         EURJPY=     126.15         126.33      -0.14%         -6.68%      +126.9800   +126.0300
 Dollar/Swiss     CHF=        0.9932         0.9932      +0.00%         +1.94%      +0.9944     +0.9901
 Sterling/Dollar  GBP=        1.2748         1.2766      -0.14%         -5.65%      +1.2825     +1.2752
 Dollar/Canadian  CAD=        1.3078         1.3131      -0.40%         +3.98%      +1.3136     +1.3071
 Australian/Doll  AUD=        0.7258         0.7268      -0.14%         -6.96%      +0.7283     +0.7251
 Euro/Swiss       EURCHF=     1.1300         1.1329      -0.26%         -3.33%      +1.1354     +1.1271
 Euro/Sterling    EURGBP=     0.8922         0.8935      -0.15%         +0.44%      +0.8941     +0.8898
 NZ               NZD=        0.6604         0.6577      +0.41%         -6.80%      +0.6609     +0.6571
 Dollar/Norway    NOK=        8.3706         8.3618      +0.11%         +1.99%      +8.3740     +8.3388
 Euro/Norway      EURNOK=     9.5241         9.5420      -0.19%         -3.29%      +9.5487     +9.5190
 Dollar/Sweden    SEK=        9.0992         9.1165      -0.46%         +10.94%     +9.1291     +9.0802
 Euro/Sweden      EURSEK=     10.3530        10.4009     -0.46%         +5.22%      +10.4070    +10.3519

 (Additional reporting by Tom Finn in London
Hideyuki Sano in Tokyo 
Editing by Larry King and Jon Boyle)
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