Turkish lira bounced back from its multi-month lows after President Tayyip Erdogan’s statements on Monday, which paved the way for the de-escalation of a diplomatic crisis. Earlier, Erdogan had threatened to expel foreign ambassadors from western countries including the US. This comment gave investors another reason to sell the Turkish lira due to political instability. After tumbling as much as 2.4% to a record low, the lira has gained back slightly today after the new comment that Turkey welcomed western embassies as long as they do not interfere in internal affairs.
German business morale deteriorated for the fourth month in October. Supply bottlenecks in manufacturing, a spike in energy prices, and rising COVID infections are slowing the pace of recovery. The latest business climate index fell to 97.7 from 98.8. This was the lowest reading since April. EURUSD is trading at 1.1605, down by -0.05% at press time.