USD/TRY advances to weekly highs around 14.75

• USD/TRY extends weekly bounce to 14.75 zone.
• The lira depreciates despite a weaker dollar.

The lira loses more ground and raises the USD/TRY to the weekly high area at 14.70/75 on Thursday.

USD/TRY continues to trade sideways

USD/TRY moderated Wednesday’s small retracement and resumes weekly gains despite the offered stance on the dollar and the better mood in the risk-linked space.

The weekly pullback in the Turkish currency appears to be supported by sour sentiment among investors after inflation figures in the country saw the CPI rise to a 20-year high above 61% in March. In this regard, finmin N.Nebati said on Wednesday that “if the exchange rate has stabilized and interest rates are off the agenda, sooner or later we will manage to lower inflation together.”

It is worth remembering that Nebati has committed to reducing inflation to single digits during 2023.

Later in the session, Turkish Treasury cash balance figures will be released ahead of Friday’s year-end CPI forecast.

What to look for around TRY

The lira remains range-bound against the dollar, always in the area below the 15.00 zone at the moment. Price action in the Turkish currency so far is expected to revolve around energy price performance, broad risk appetite trends, Fed rate path and war developments. in Ukraine. Additional risks facing the TRY also stem from domestic issues, as inflation shows no signs of abating, real interest rates remain entrenched in the negative, and political pressure to keep the CBRT biased toward low interest rates remains pervasive. .

Technical levels

So far the pair is gaining 0.24% at 14.7387 and faces the next hurdle at 14.9889 (11 Mar 2022 high) followed by 18.2582 (20 Dec all-time high) and then 19.00 (round level ). On the other hand, a drop below 14.6150 (monthly low Apr 1) would expose 14.5136 (weekly low Mar 29) and finally 14.0920 (55-day SMA).