Turkey's economy minister called for radical rate cuts — here's what's happening in FX

Sergei Karpukhin/Reuters

Good morning!

The biggest move in FX as of Wednesday, April 6 8:15 a.m is the Turkish lira following comments from Turkey's economy minister.

Here's the scoreboard:

• The Turkish lira is weaker by 0.8% at 2.8536 per dollar after Turkey's Economy Minister Mustafa Elitaş said that the central bank should "radically" cut rates, according to Bloomberg's Benjamin Harvey. Notably, there's currently some indecision about who will take the helm of the Turkish central bank when the current governor's term expires in a month, adding more uncertainty to the bank's future decisions. "The good news is that the frontrunners mentioned in the media appear to be fairly credible candidates," wrote a Capital Economics team. "Even so, it's difficult to see any governor successfully bringing down inflation and moving back to a more orthodox monetary policy." The bank's rates are currently at 7.50%.
• The dollar index is stronger by 0.4% ahead the release of the minutes from the Fed's March meeting, which will be out at 2 p.m. ET. The minutes are likely to outline a shift from not only examining inflation and unemployment in the US to also looking at developments overseas. Wells Fargo's Sam Bullard wrote, "Indeed, investors will be paying close attention to the evidence that led all officials to cut their median interest rate projections in 2016 from four hikes to two."
• The Polish zloty is weaker by 0.3% after the Polish National Bank kept rates on hold at 1.50%, as was expected. "We think the economy will continue to perform well both this year and next and, accordingly, we don't expect additional easing over our forecast horizon. ... We remain of the view that the policy rate will stay unchanged at 1.5% both this year and next," wrote Capital Economics' William Jackson after the bank's announcement.
• The Japanese yen is little changed versus the dollar at 110.41. However, earlier on Tuesday, the yen briefly surged past 110 per dollar to the highest since the BoJ Governor Haruhiko Kuroda boosted monetary easing in October 2014.
• The euro is weaker by 0.4% at 1.1338 after Germany's industrial production fell by 0.5% month-over-month, beating expectations of a 1.8% drop. Yesterday, IMF managing director Christine Largarde warned that although the world isn't in a crisis, "the recovery remains too slow, too fragile, and risks to its durability are increasing.
• The British pound is weaker by 0.9% at 1.4030, and at its lowest level in a month.

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