FOREX-Euro tumbles as investors fear bank exposures to Turkey

Reuters

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    * Turkish lira plunges, sparks broad risk aversion
    * Euro affected by fears of bank exposures to Turkey
    * British pound drops on concern of "hard" Brexit

 (Adds quote, updates prices)
    By Karen Brettell
    NEW YORK, Aug 10 (Reuters) - The euro sank to its lowest
against the greenback in more than a year on Friday as a
plunging Turkish lira sparked broad risk aversion, with
investors worried about contagion to European banks.
    Turkey's lira plummeted as much as 18 percent on Friday as
worries about President Tayyip Erdogan's influence over monetary
policy and worsening U.S. relations snowballed into a market
panic.  urn:newsml:reuters.com:*:nL5N1V10HI
    The euro was hurt after the Financial Times reported that
the European Central Bank had concerns about banks in Spain,
Italy and France and their exposure to Turkey's woes.
 urn:newsml:reuters.com:*:nL5N1V124H
    Both currencies added to losses after U.S. President Donald
Trump said he had authorized a doubling of tariffs on steel and
aluminum imports from Turkey. "Our relations with Turkey are not
good at this time!," Trump said on Twitter.  urn:newsml:reuters.com:*:nL1N1V10IN
    Exposure to Turkey could affect European banks’ bottom lines
“and could have a domino effect throughout Europe as people
begin to pull out of those banks and into the U.S. That’s why
we’ve seen a spike in the dollar,” said Gregan Anderson,
macroeconomic strategist at brokerage Bulltick LLC.
    The euro  EUR=EBS  dropped below technical support at $1.15
to $1.1414, down 0.97 percent on the day and the lowest since
July 2017. Against the yen, the euro slid 1.35 percent to 126.30
yen, a more than two-month low.  EURJPY=EBS 
    “You’ve had a fairly sharp move lower in the euro and it’s
broken through key technical levels as well,” said Richard
Franulovich, head of FX strategy at Westpac Banking Corp in New
York.
    Erdogan earlier told Turks to exchange gold and hard
currency into lira, framing the crisis as a "national battle"
against economic enemies.
    “He spoke today sounding very combative and defiant instead
of possibly offering a bit of fig leaf to the U.S.,” said
Franulovich.
    The flight from risky assets heaped pressure on
commodity-linked currencies including the Australian dollar,
which fell 1 percent to $0.7280, an 18-month low.  AUD=D3 
    The dollar index edged only slightly higher after data on
Friday showed that core consumer prices rose 0.2 percent in
July, in line with economists’ expectations and the same gain as
in May and June.  urn:newsml:reuters.com:*:nLNSAJEEIC
    The British pound dropped to its lowest in more than a year
on concerns about a "hard" Brexit.  GBP=D3 
    
    ========================================================
    Currency bid prices at 11:42AM (1542 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1414        $1.1526     -0.97%         -4.85%      +1.1536     +1.1414
 Dollar/Yen       JPY=        110.6300       111.0700    -0.40%         -1.81%      +111.1600   +110.5200
 Euro/Yen         EURJPY=     126.30         128.03      -1.35%         -6.57%      +128.1100   +126.2000
 Dollar/Swiss     CHF=        0.9944         0.9932      +0.12%         +2.06%      +0.9975     +0.9929
 Sterling/Dollar  GBP=        1.2776         1.2822      -0.36%         -5.45%      +1.2836     +1.2724
 Dollar/Canadian  CAD=        1.3105         1.3048      +0.44%         +4.20%      +1.3122     +1.3043
 Australian/Doll  AUD=        0.7305         0.7370      -0.88%         -6.36%      +0.7380     +0.7282
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1352         1.1452      -0.87%         -2.88%      +1.1461     +1.1347
 Euro/Sterling    EURGBP=     0.8933         0.8987      -0.60%         +0.56%      +0.8991     +0.8929
 NZ               NZD=        0.6605         0.6612      -0.11%         -6.79%      +0.6621     +0.6572
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.3585         8.3177      +0.49%         +1.85%      +8.3785     +8.3084
 Euro/Norway      EURNOK=     9.5417         9.5879      -0.48%         -3.12%      +9.5940     +9.5281
 Dollar/Sweden    SEK=        9.1219         9.0068      +0.31%         +11.22%     +9.1418     +8.9998
 Euro/Sweden      EURSEK=     10.4140        10.3822     +0.31%         +5.84%      +10.4615    +10.3580
 
    

 (Additional reporting by Tom Finn in London and Rodrigo Campos
in New York)
 ((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; Reuters
Messaging: karen.brettell.reuters.com@reuters.net))

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