USD/TRY flirts with three-day highs around 16.70

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  • USD/TRY leaves Wednesday’s advance behind and tests 16.70.
  • Türkiye’s trade deficit widened to TL 10.61B.
  • Attention now turns to Monday’s CPI release.

The Turkish lira cuts some ground and pushes the USD/TRY to the three-day high zone around 16.70 on Thursday.

USD/TRY appears to be supported near 16.00

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USD/TRY continues the choppy trade so far and recovers lost ground after Wednesday’s pullback, targeting the 16.00 area once again amid continued USD bullish momentum as well as rising risk-off sentiment.

The lira continues to relinquish some of Monday’s strong gains, as the pair fell back to the 16.00 area in response to the Turkish banking watchdog’s announcement to ban lira-denominated business lending to companies with a strong foreign currency position. (on Friday).

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On the national calendar, the trade deficit increased to 10.61 billion lira in May (from 6.11 billion lira).

The next appointment will be the publication of the key inflation figures for the month of June, scheduled for July 4.

What to keep in mind around TRY

USD/TRY continues to digest the recent sharp drop and subsequent rebound following Friday’s announcement from the Turkish banking watchdog.

So far, the price action of the Turkish currency is expected to revolve around the behavior of energy prices, the general trends in risk appetite, the path of the Fed rates and the developments of the war in Ukraine, although the effects of this new measure aimed at supporting the de-dollarization of the economy will also have their opinion.

Additional risks facing the TRY also come from within, as inflation shows no signs of abating, real interest rates remain entrenched in the negative, and political pressure for the CBRT to lean toward interest rates Low interest is still ubiquitous.

key levels

So far the pair is gaining 0.67% at 16.6867 and faces the immediate target of 17.3759 (23 Jun high) followed by 18.2582 (20 Dec all-time high) and then 19.00 (round level). On the other hand, a break of 16.0365 (monthly low Jun 27) would pave the way for a test of 15.6684 (low May 23) and eventually 15.2373 (100-day SMA).

Source: Fx Street

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