USD/TRY adds to recent gains and approaches 18.60…again

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  • USD/TRY extends weekly rally to near 18.60.
  • The upbeat tone in the dollar lends additional legs to the pair.
  • The US ADP report was positive in September.

The resumption of buying interest around the dollar pushes the USD/TRY to the 18.58 area on Wednesday, just below Tuesday’s all-time highs.

USD/TRY continues to target 19.00

USD/TRY is trading with gains for the second consecutive session and remains close to the 18.60 area, thanks to the recovery of the dollar after a negative start to the new trading week.

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Domestically, the depreciation around the lira appears unabated, especially after inflation figures released on Monday showed the CPI rose to a new 24-year high, passing 83% in the year to September. .

On the US calendar, the ADP report showed that the US private sector added 208,000 jobs in September, beating expectations and adding to August’s gain of 132,000. Later in the session, all attention is expected to turn to the ISM Non-Manufacturing release.

What to look for around the TRY

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USD/TRY continues to cruise around all-time highs near 18.60 amid the combination of pervasive lira weakness and renewed dollar supply bias.

So far, the price action around the Turkish lira is expected to continue to revolve around the behavior of energy and commodity prices – which are directly correlated to the developments of the war in Ukraine – the broad risk appetite trends and the path of Fed rates in the coming months.

Additional risks facing the Turkish currency are also coming from within, as inflation shows no signs of abating (despite rising less than expected in July and August), real interest rates remain well entrenched in negative territory and political pressure for the CBTR to lean towards low interest rates remains pervasive.

Furthermore, the lira will continue to suffer against the background of Ankara’s plans to prioritize growth (through higher exports and tourism revenues) and improving the current account.

Technical levels

So far the pair is gaining 0.10% at 18.5772 and faces the next hurdle at 18.5908 (Oct 4th all-time high), followed by 19.00 (round level). To the downside, a break below 18.1142 (55-day SMA) would expose 17.8590 (weekly low Aug 17) and finally 17.7586 (monthly low).

Source: Fx Street

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