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An emailed report dated September 13th and cited by Bloomberg suggested that investors would benefit from buying lira against an equally-weighted basket of euros and dollars.
It suggested that a target of 2 liras against this with a "stop loss" of 2.17 is appropriate.
On August 22 the lira closed at a record low against the basket of 2.1786, but at 10:33 in Istanbul today, it was at 2.0977.
"With signs now appearing that the demand side of the economy is rebalancing, we think that the lira will strengthen from here," the report stated.
It added that the underperformance of the currency so far in 2011 might be attributable to scepticism among forex traders about the policy mix of the central bank.
Since the start of the year, the lira has fallen in value against the pound, dipping from over £0.40 to its current level of £0.3574.
Posted by Greg Secker
