USD/TRY hits 4-day highs around 16.75

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  • USD/TRY adds to Thursday’s advance near 17.00.
  • Türkiye’s manufacturing PMI dropped to 48.10 in June.
  • Investors’ attention shifts to Monday’s CPI release.

The Turkish lira loses more ground and pushes the USD/TRY to new multi-day highs near 16.75 on Friday.

USD/TRY remains supported around 16.00

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USD/TRY advances for the second consecutive session at the end of the week and is slowly approaching the key barrier of 17.00.

In this way, the pair continues to recover lost ground after the sharp drop recorded on Monday, all in response to the measure adopted on Friday by the banking supervisory body (BDDK) to prop up the national currency.

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It is worth remembering that the BDDK prohibited business loans in Turkish lira to companies with a strong holding of foreign currency. Companies could therefore access lira loans by converting foreign exchange into government-protected time deposits or by purchasing securities.

Going forward, all attention will be focused on the release on Monday of the June inflation figures, according to the CPI (73.50% YoY).

Earlier, in Turkey, the manufacturing PMI fell to 48.10 in June (from 49.20).

What to keep in mind around TRY

USD/TRY continues to digest the recent sharp decline 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 0.41% at 16.7509 and faces the immediate target of 17.3759 (23 Jun high) seconded 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 15.2702 (100-day SMA).

Source: Fx Street

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