USD/TRY climbs to multi-day highs near 14.3000

• USD/TRY advances further and reaches new monthly highs.
• USD strength, geopolitics and inflation continue to weigh on the lira.
• US non-farm payrolls surprised to the upside.

The Turkish lira remains under pressure and is now raising the USD/TRY to new monthly highs around 2:30 pm at the end of the week.

USD/TRY watch Russia-Ukraine

USD/TRY advances for the fifth consecutive session so far on Friday, this time posting fresh monthly highs in the 14.20/30 area against the backdrop of widespread risk-off sentiment and the bullish bias in the US dollar.

Meanwhile, the lira remains under the microscope following the deteriorating geopolitical scenario combined with the sharp rally in commodities, particularly crude oil, and the relentless rally in the dollar, which posted new highs at levels seen by last time at the end of May 2020. .

A further selling bias in TRY is seen coming from the release of Thursday’s inflation figures from Turkey, where the headline CPI is up nearly 55% in the year to February and nearly 5% on a monthly basis. Meanwhile, core prices are up 44.05% from a year earlier and producer prices are up 105.01% in the last 12 months.

What to look for around TRY

A new bullish momentum encourages the pair to post new yearly highs beyond the 14.00 barrier, while leaving behind the 2-month consolidation theme supported by surprising lira stability. However, the lira is forecast to remain under scrutiny amid rampant inflation (and seemingly no measures to address the problem), negative real interest rates, and pervasive political pressure to keep the CBRT biased towards low interest rates.

key levels

So far the pair is up 1.15% at 14.2569 and a drop below 13.7143 (25 Feb low) would expose 13.5091 (18 Feb low) and finally 12.4317 (11 Feb low). On the other hand, the next upside barrier lines up at 14.6052 (24 Feb 2022 high) followed by 18.2582 (20 Dec all-time high).