The Turkish lira loses further ground and pushes USD/TRY
The Turkish lira loses further ground and pushes the USD/TRY to new multi-day highs near 16.75 on Friday. USD/TRY keeps digesting the recent sharp decline and subsequent rebound following Friday’s announcement by the Turkish banking watchdog. So far, price action in the Turkish currency is expected to gyrate around the performance of energy prices, the broad risk appetite trends, the Fed’s rate path, and the developments from the war in Ukraine, although the effects of this new measure aimed at supporting the de-dollarization of the economy will also have its say.
Extra risks facing TRY also come from the domestic backyard, as inflation gives no signs of abating, actual interest rates remain entrenched in negative figures and the political pressure to keep the CBRT biased towards low-interest rates remains omnipresent. So far, the pair is gaining 0.41% at 16.7509 and faces the immediate target at 17.3759 (2022 high June 23) seconded by 18.2582 (all-time high December 20) and then 19.00 (round level). On the other hand, a breach of 16.0365 (monthly low June 27) would pave the way for a test of 15.6684 (low May 23) and finally 15.2702 (100-day SMA).