- USD / TRY remains capped below 7.7550 after a 10% selloff last week.
- Erdogan’s plan to introduce a new economic model has boosted the lira.
- The US dollar could have hit a major top at 8.58 – Commerzbank.
The U.S. dollar it remains unable to break away from last week’s lows just below 7.6000 and is moving sideways with limited bullish attempts below 7.7550. The dollar consolidates losses after sinking 10% last week.
The lira rebounds due to Turkey’s new economic plan
The Turkish lira had its best weekly performance since 2008 last week. President Erdogan’s promise to introduce a new economic model and the replacement of the entire economic team boosted confidence in TRY.
Erdogan promised an economic strategy based on financial stability and lower inflation to attract international investment and replaced the governor of the Central Bank, as well as the finance and finance ministers.
Beyond that, the market has priced in an interest rate hike by the CBRT, from the current 10.25% to 15%, which will be announced after its November 19 meeting. This has contributed to strengthening the lira, which had depreciated around 40% so far this year.
USD / TRY could have hit a major high at 8.58 – Commerzbank
According to Axel Rudolph, Commerzbank’s FICC Senior Technical Analyst, USD / TRY could have hit a major high last week: “USD / TRY formed a major high at its recent all-time high at 8.5814 (based on CQG data) before quickly move towards the end of September low and 2020 uptrend line at 7.4945 / 4618. In this area, the cross is likely to stabilize in the near term. ”
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