USD / TRY advances to 2-day highs near 13.6000

• USD / TRY adds to Tuesday’s gains well above 13.00.
• The lira loses ground after a positive start to the year.
• The focus remains on the next CBRT event later in the month.

The Turkish lira accelerates losses and pushes USD / TRY to fresh 2-day highs at the 13.60 zone midweek.

USD / TRY Stronger After Turkey CPI

USD / TRY posted gains for the second day in a row on Wednesday, regaining bullish traction and extending the bounce from Monday’s lows at the 12.70 zone.

The lira resumed its fall in past sessions after cracks in confidence appeared after the government’s announcement of a plan to reduce the dollarization of the economy and, therefore, promote savings in the national currency.

Meanwhile, the effects of President Erdogan’s bailout plan continue to wear off and the impact on the lira is increasingly visible, particularly after inflation in the country rose above 36% in the year to December, the lowest level. high in the last 19 years.

What to look for around TRY

The lira resumed its downtrend as market participants continued to absorb recent inflation figures and government measures to promote the exchange of dollars into the national currency. The reluctance of the CBRT to change course (collision?) And the ever-present political pressure to favor lower interest rates in the current context of runaway inflation is expected to keep the lira under intense pressure. That said, another visit to the all-time high above 18.00 for USD / TRY should not be ruled out just yet.

Key levels

So far, the pair is gaining 1.36% at 13.5339 and a drop below 12.7523 (weekly low on Jan 3) would pave the way for a test of 11.8128 (55-day SMA) and finally 10.2027 (monthly low on Jan 23). December). On the other hand, the next ascending barrier is lined up at 13.8967 (Jan. 3 weekly high) followed by 18.2582 (Dec 20, 2021 all-time high) and then 19.0000 (round level).