BUZZ-COMMENT-If you believe in miracles, you'll buy the Turkish lira

Aug 27 (Reuters) - Stimulus has boosted riskier assets, turning bad news into good news and encouraging traders to gambling. For FX traders, the biggest gamble is Turkey's lira, which is certainly cheap but also the highest-yielding major traded currency. If you believe in the miracle of stimulus, you'll buy it.

JP Morgan is a believer. In a note to clients, it observed a "clear loss" of selling momentum in the last two weeks and said the currency could rally, especially if it breaks below 7.189 versus the dollar .

Much of that loss of momentum is caused by intervention and other policies designed to curb the lira's drop, but coupled with such a big rise in risk appetite even the lira is gong to draw some buy recommendations.

Traders must weigh up whether an 8.25% interest rate is attractive enough to offset FX risk. It took USD/TRY just 25 days to rise 8.5% and reach the record peak. That was two days ago.

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USD/TRYhttps://tmsnrt.rs/34BLffL

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

((jeremy.boulton@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.