Turkey bans short selling as political turmoil fuels stock market rout
Market Response to Political Turmoil: Turkey has banned short selling in its stock market and eased share buyback rules following the arrest of opposition leader Ekrem Imamoglu, which led to a significant drop in the benchmark index and widespread protests.
Central Bank Actions: In response to market volatility and a record low for the Turkish lira, the Central Bank of the Republic of Türkiye raised interest rates unexpectedly and suspended one-week repo auctions, indicating a tightening of monetary policy if inflation worsens.
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Warning of Coordinated FX Intervention This Weekend - Japan and South Korea Stand Firm on Currency Volatility
Currency Concerns: Japan and South Korea have expressed serious concern over the sharp depreciation of the yen and won, driven by dollar strength amid geopolitical tensions and rising oil prices.
Preparedness to Act: Both countries' finance ministers stated they are ready to intervene if foreign-exchange volatility becomes excessive or disorderly, with the yen nearing a critical intervention level of 160 per dollar.
Market Monitoring: Authorities will closely monitor foreign-exchange markets and are committed to taking appropriate measures to address any excessive volatility that threatens economic stability.
Skepticism on Intervention: Despite public commitments to act, some policymakers privately doubt the effectiveness of direct intervention if geopolitical tensions continue to drive demand for the U.S. dollar.
Indicative Forex Prices for Monday, March 16, 2026
- Weekend Markets: Current weekend markets do not reflect wholesale participation, with significant trading activity expected as major markets open.
- FX Trading: Real wholesale flows in foreign exchange (FX) will become more apparent once trading resumes in major markets.
- USD Movement: There has been a slight decrease in the value of the USD since late Friday.
- Upcoming Updates: Further relevant news from the weekend will be provided soon.
What’s Driving the Surge of the US Dollar Amid Rising Rate Hike Expectations for Other Central Banks?
US Dollar Performance: The US dollar began the week negatively but gained strength due to a combination of hawkish interest rate expectations and safe haven demand amid geopolitical tensions, particularly related to oil prices and the situation in the Strait of Hormuz.
Market Dynamics: The dollar's rise is attributed to the unwinding of overcrowded short positions, as noted in the Bank of America Fund Manager Survey, which indicated record shorts on the US dollar, leading to significant market adjustments.
Future Scenarios: Two potential scenarios for the dollar's future are outlined: one where prolonged conflict leads to a bear market and weaker dollar, and another where a resolution occurs, resulting in a stronger dollar.
Impact of Geopolitical Events: The market's reaction to geopolitical developments, such as Trump's comments on the war, suggests that any positive news could lead to a stronger rally in the dollar, especially if oil prices surge again.
GBPUSD Bounces Off Key Trendline as US Dollar Strengthens with Renewed Risk Aversion
USD Movement: The US dollar weakened due to falling oil prices and expectations of a quick resolution to the US-Iran conflict, but reversed course after reports of potential Iranian military actions, leading to renewed hawkish rate expectations.
GBP Rate Expectations: Traders have shifted from anticipating rate cuts to pricing in a 40% chance of a rate hike for the GBP by year-end, influenced by rising oil prices and expected inflation.
GBPUSD Technical Analysis: The GBPUSD pair is facing downward pressure after rejecting a major trendline, with sellers likely to push for new lows while buyers seek a breakout above the trendline for potential gains.
Upcoming Economic Data: Key US economic indicators, including Jobless Claims and the PCE price index, are set to be released, but market focus remains primarily on the US-Iran conflict, potentially overshadowing the data's impact.
Danske: Middle East Energy Disruptions Increase Downside Risks for EUR/USD
Market Shift: The EUR/USD exchange rate initially aimed for the 1.2000 level but has reversed direction due to rising global energy prices and tensions in the Gulf region, particularly involving Iran.
Economic Impact: Higher energy prices are expected to negatively affect economic activity in Europe, which had been showing signs of resilience in its recovery.
Trading Strategy: Danske Bank suggests a tactical short position on EUR/USD, targeting the 1.1200 level, as they believe the balance of risks has shifted to the downside.
Technical Analysis: The 1.1500 level is crucial for EUR/USD; a break below this could lead to further declines, with the next significant support around the 1.1167 mark.
EURUSD Steadies Amid Positive Developments, Yet Downside Risks Persist
US Dollar Movement: The US dollar weakened initially due to expectations of a quick resolution to the US-Iran conflict but later regained strength as concerns about Iran's military actions emerged. The upcoming US CPI report is anticipated to have limited impact due to the ongoing war.
EUR Outlook: The European Central Bank (ECB) is maintaining a cautious stance regarding interest rates amid Middle East tensions, with a 55% chance of a rate hike in June. A prolonged conflict could hinder economic activity and affect the euro negatively.
EURUSD Technical Analysis: The EURUSD pair is experiencing a rangebound price action, with key resistance at 1.1655 and support around 1.1575. Sellers are likely to target new lows, while buyers are looking for a breakout to higher levels.
Upcoming Economic Data: Key economic reports, including US Jobless Claims and the PCE price index, are scheduled for release this week, but market focus remains primarily on the US-Iran war, potentially overshadowing the data's significance.
Warning of Coordinated FX Intervention This Weekend - Japan and South Korea Stand Firm on Currency Volatility
Currency Concerns: Japan and South Korea have expressed serious concern over the sharp depreciation of the yen and won, driven by dollar strength amid geopolitical tensions and rising oil prices.
Preparedness to Act: Both countries' finance ministers stated they are ready to intervene if foreign-exchange volatility becomes excessive or disorderly, with the yen nearing a critical intervention level of 160 per dollar.
Market Monitoring: Authorities will closely monitor foreign-exchange markets and are committed to taking appropriate measures to address any excessive volatility that threatens economic stability.
Skepticism on Intervention: Despite public commitments to act, some policymakers privately doubt the effectiveness of direct intervention if geopolitical tensions continue to drive demand for the U.S. dollar.
Indicative Forex Prices for Monday, March 16, 2026
- Weekend Markets: Current weekend markets do not reflect wholesale participation, with significant trading activity expected as major markets open.
- FX Trading: Real wholesale flows in foreign exchange (FX) will become more apparent once trading resumes in major markets.
- USD Movement: There has been a slight decrease in the value of the USD since late Friday.
- Upcoming Updates: Further relevant news from the weekend will be provided soon.
What’s Driving the Surge of the US Dollar Amid Rising Rate Hike Expectations for Other Central Banks?
US Dollar Performance: The US dollar began the week negatively but gained strength due to a combination of hawkish interest rate expectations and safe haven demand amid geopolitical tensions, particularly related to oil prices and the situation in the Strait of Hormuz.
Market Dynamics: The dollar's rise is attributed to the unwinding of overcrowded short positions, as noted in the Bank of America Fund Manager Survey, which indicated record shorts on the US dollar, leading to significant market adjustments.
Future Scenarios: Two potential scenarios for the dollar's future are outlined: one where prolonged conflict leads to a bear market and weaker dollar, and another where a resolution occurs, resulting in a stronger dollar.
Impact of Geopolitical Events: The market's reaction to geopolitical developments, such as Trump's comments on the war, suggests that any positive news could lead to a stronger rally in the dollar, especially if oil prices surge again.
GBPUSD Bounces Off Key Trendline as US Dollar Strengthens with Renewed Risk Aversion
USD Movement: The US dollar weakened due to falling oil prices and expectations of a quick resolution to the US-Iran conflict, but reversed course after reports of potential Iranian military actions, leading to renewed hawkish rate expectations.
GBP Rate Expectations: Traders have shifted from anticipating rate cuts to pricing in a 40% chance of a rate hike for the GBP by year-end, influenced by rising oil prices and expected inflation.
GBPUSD Technical Analysis: The GBPUSD pair is facing downward pressure after rejecting a major trendline, with sellers likely to push for new lows while buyers seek a breakout above the trendline for potential gains.
Upcoming Economic Data: Key US economic indicators, including Jobless Claims and the PCE price index, are set to be released, but market focus remains primarily on the US-Iran conflict, potentially overshadowing the data's impact.
Danske: Middle East Energy Disruptions Increase Downside Risks for EUR/USD
Market Shift: The EUR/USD exchange rate initially aimed for the 1.2000 level but has reversed direction due to rising global energy prices and tensions in the Gulf region, particularly involving Iran.
Economic Impact: Higher energy prices are expected to negatively affect economic activity in Europe, which had been showing signs of resilience in its recovery.
Trading Strategy: Danske Bank suggests a tactical short position on EUR/USD, targeting the 1.1200 level, as they believe the balance of risks has shifted to the downside.
Technical Analysis: The 1.1500 level is crucial for EUR/USD; a break below this could lead to further declines, with the next significant support around the 1.1167 mark.
EURUSD Steadies Amid Positive Developments, Yet Downside Risks Persist
US Dollar Movement: The US dollar weakened initially due to expectations of a quick resolution to the US-Iran conflict but later regained strength as concerns about Iran's military actions emerged. The upcoming US CPI report is anticipated to have limited impact due to the ongoing war.
EUR Outlook: The European Central Bank (ECB) is maintaining a cautious stance regarding interest rates amid Middle East tensions, with a 55% chance of a rate hike in June. A prolonged conflict could hinder economic activity and affect the euro negatively.
EURUSD Technical Analysis: The EURUSD pair is experiencing a rangebound price action, with key resistance at 1.1655 and support around 1.1575. Sellers are likely to target new lows, while buyers are looking for a breakout to higher levels.
Upcoming Economic Data: Key economic reports, including US Jobless Claims and the PCE price index, are scheduled for release this week, but market focus remains primarily on the US-Iran war, potentially overshadowing the data's significance.
