Price action remains sideways around 13.60

• USD/TRY further extends its consolidation theme near 13.60.
• Turkey’s 10-year bond yields fall further and approach 21%.
• Turkey’s next unemployment rate will be available on Thursday.

The USD/TRY trades in a tight range around the usual 13.50/60 zone on Wednesday.

USD/TRY stays within the range, watch the CBRT

USD/TRY remains sideways around the familiar 13.50/60 zone for yet another session on Wednesday, extending the muted price action that started in mid-January.

Meanwhile, the lira seems vigilant following recent developments from a series of finmin N.Nebati meetings with investors in London.

Nebati outlined Ankara’s plans for a stable currency amid an economic program based on low debt ratios (?), avoiding further dollarization of the economy and bringing inflation to single digits by mid-2023.

The Turkish finmin also said the government is expected to announce a plan to encourage households to convert gold holdings into national currency.

What to look for around TRY

The pair keeps its multi-week consolidation theme in place, always within the 13.00-14.00 range. While skepticism remains high about the effectiveness of the ongoing scheme to promote de-dollarization of the economy, thereby supporting inflows into the lira, the CBRT’s reluctance to change course (collision?) and the pervasive political pressure to favor Lower interest rates in the current context of runaway inflation and (very) negative real interest rates are a sure recipe to keep the national currency under pressure for the time being.

Additional technical levels

So far the pair is up 0.26% at 13.5825 and a drop below 13.3494 (55-day SMA) would expose 13.2327 (monthly low Feb 1) and finally 12.7523 (low Jan 3, 2022). On the other hand, the next upside barrier lines up at 13.9319 (Jan 10, 2022 high), followed by 18.2582 (Jan 20 all-time high) and then 19.0000 (round level).