Turkish lira weakens slightly after U.S. House backs sanctions

Credit: REUTERS/Murad Sezer

ISTANBUL, Oct 30 (Reuters) - The Turkish lira weakened on Wednesday after the U.S. House of Representatives overwhelmingly backed legislation calling on President Donald Trump to impose sanctions on Turkey over its offensive in northern Syria.

House lawmakers also voted overwhelmingly to recognise the mass killings of Armenians a century ago as a genocide, a symbolic but historic vote instantly denounced by Turkey.

At 0718 GMT, the lira TRYTOM=D3 stood at 5.7690 against the lira, weakening from a close of 5.7455 on Tuesday.

"The announcements coming from the USA are somewhat worrying but the exchange rate reaction was limited. I think this is due to Trump's silence," said Integral Securities analyst Eda Karadag.

The fate of both measures in the Senate is unclear, with no vote scheduled on similar legislation.

Turkey accepts that many Armenians living in the Ottoman Empire were killed in clashes with Ottoman forces during World War One, but contests the figures and denies that the killings were systematically orchestrated and constitute a genocide.

The main Istanbul share index .XU100 fell 1.14%.

Market attention in Turkey was also focused on the prospect of a rate cut on Wednesday by the Federal Reserve, and on the Turkish central bank's quarterly inflation report which is scheduled to be released on Thursday.

Expectations of further U.S. monetary policy loosening have emboldened investors in global markets.

Last Thursday, Turkey's central bank slashed its policy rate by a more-than-expected 250 basis points to 14%, taking advantage of an inflation dip and a steadier lira after Washington cancelled sanctions over Ankara's military incursion targeting the Syrian Kurdish YPG militia.

(Reporting by Behiye Selin Taner; Writing by Daren Butler; Editing by Jonathan Spicer)

((daren.butler@tr.com; +90-212-350 7053; Reuters Messaging: daren.butler.thomsonreuters.com@reuters.net))

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

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