The Turkish lira is showing significant strength against the dollar, as traders shrug off the effects of the Federal Reserve rate hike.
When the Fed, on Dec. 16, raised its key interest rate to the range of 0.25 to 0.50 percent from 0 to 0.25 percent, many economists expected emerging market currencies to fall sharply to the U.S. currency.
But the Turkish lira has risen steadily against the dollar since that date, jumping from about 2.94 to the dollar to about 2.90 in early morning trading on Tuesday.
Many traders had also predicted a drop in the lira after the Turkish central bank held rates on Dec. 22.
Instead, a number of emerging market currencies have continued to fall against the dollar, while the lira holds firm, despite weakness from both developed and emerging market currencies. The dollar index is up 10 percent against the basket of major currencies for 2015.
The South African rand, the Russian ruble, the Brazilian real have all fallen at least 20 percent against the dollar since the beginning of the year, while the Turkish lira, which had been down 20 percent as well, is coming back.