- USD/TRY rises and approaches the 13.90 area.
- The lira remains on the defensive despite the risk-on mood.
- Turkey’s 10-year bond yields rise to 2-week highs above 21%.
The Turkish currency depreciates further and now sends the USD/TRY back near the 13.90 level on Wednesday.
USD/TRY rises due to geopolitical risks
USD/TRY is approaching the yearly high area just below the 14.00 barrier as the Turkish currency stays on the defensive in response to growing geopolitical concerns and equally rising uncertainty surrounding the conflict in the east. from Ukraine.
The deteriorating Russia-Ukraine scenario poses further risks to Turkey’s macro stability, while the prospect of higher crude prices in response to potential supply disruptions is also another factor weighing on the lira so far.
Furthermore, the proximity of the start of the Fed’s tightening cycle also puts the lira under additional scrutiny amid high levels of external debt held by companies and domestic lenders.
key levels
So far the pair is up 0.44% at 13.8352 and a drop below 13.4317 (weekly low Feb 11) would expose 13.2327 (monthly low Feb 1) and finally 12.7523 (low Jan 3, 2022). . On the other hand, the next upside barrier lines up at 13.9013 (monthly high Feb 22) followed by 13.9319 (high Jan 10, 2022) and then 18.2582 (all-time high Dec 20).
Source: Fx Street
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