Turkey’s currency crisis became full-fledged in August amid an ongoing withdrawal of global liquidity stemming from continued monetary tightening in the U.S. as well as lasting economic policy mistakes.
The US represents the largest final consumer market with nearly 30% of global household consumption. As it contemplates more protectionist policies, the world may have to find itself a substitute.
One of the main headaches that has been plaguing financial markets in recent months is the possibility of further devaluation of the Chinese yuan. It would make Chinese exports even more competitive and is therefore seen as a risk that reinforces deflationary pressures on world markets.
