Lira Gains 2nd Day on Italy Auction, Turkey Consumer Confidence

The lira gained for a second day as a better-than-expected Italian debt auction helped improve investor sentiment and consumer confidence rose in Turkey for a fourth consecutive month.

The Turkish currency pared its monthly loss after Italy managed to sell the maximum $6.25 billion ($8.5 billion) at a bond sale today. Turkey’s gauge for consumer confidence rose to 76.7, its highest level since July. Economic confidence in the euro area increased more than economists forecast in February. The European Union is Turkey’s biggest trading partner, accounting for 37.4 percent of its exports.

“Sentiment has improved slightly today,” Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank AG in Frankfurt, said in e-mailed comments. “Most emerging-market currencies as well as the euro are recovering modestly.”

The lira gained 0.1 percent to 1.8044 per dollar by 2:35 p.m. in Istanbul, trimming its monthly retreat to 2.5 percent. Yields on two-year benchmark notes rose two basis points, or 0.02 percentage point, to 5.72 percent.

The euro appreciated 0.4 percent against the U.S. dollar, strengthening for the first time in six days.

“We had a better-than-expected Italian bond auction as well as a stronger-than-expected improvement of the Economic Sentiment Indicator for the euro zone,” Nguyen said.

An index of executive and consumer sentiment rose to 91.1 from a revised 89.5 in January, the European Commission in Brussels said.

The Treasury in Rome sold 4 billion euros of a new 10-year bond due 2023 at 4.83 percent, up from 4.17 percent at an auction of similar-maturity debt on Jan. 30 and the highest since Oct. 30. It also sold 2.5 billion euros of bonds due in 2017 at 3.59 percent compared with 2.94 percent last month.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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