- USD/TRY is trading near 18.00.
- The lira depreciates to levels last seen in December 2021.
- Türkiye’s trade deficit narrowed to 8.17B TL in June.
Additional selling pressure around the Turkish lira encourages the USD/TRY to approach 18.00 on Friday, registering at the same time new highs of the cycle.
USD/TRY is now focused on inflation data
Sellers appear to be quite comfortable around the Turkish lira as USD/TRY remains on track to close third straight week of gains amid 7-month upbeat streak. So far, the lira has shed more than 35%.
Meanwhile, prospects of further tightening by the Federal Reserve are expected to keep emerging market currencies under pressure for the rest of the year, while the war in Ukraine also poses growing risks to both Turkey’s economic outlook as for currency.
On the national calendar, the trade deficit narrowed to 8.17 billion lira in June, while foreign arrivals rose 145% in the year to June. Earlier in the week, the economic sentiment index dipped a bit to 93.40 in July (from 93.60).
Going forward, the lira and investors are expected to be cautious ahead of the big inflation figures to be released next week, after the CPI surged nearly 80% year-on-year in June.
What to keep in mind around TRY
USD/TRY bullish bias remains unchanged and remains on course to revisit the key 18.00 zone.
Meanwhile, the lira is expected to continue to oscillate around energy price developments, which seem to be directly correlated with the developments of the war in Ukraine, general trends in risk appetite and the trajectory of Fed rates in the coming months.
Additional risks facing the Turkish currency also come from within, as inflation shows no signs of abating, real interest rates remain entrenched in negative, and political pressure for the CBRT to go rate Low interest rates remain ubiquitous. In addition, there does not seem to be a plan B to attract foreign exchange in a context in which the country’s foreign exchange reserves are decreasing day by day.
key levels
So far the pair is gaining 0.14% at 17.9125 and faces the immediate target of 17.9519 (29 Jul high) seconded by 18.2582 (20 Dec all-time high) and then 19.00 (round level). On the other hand, a break of 17.1903 (weekly low Jul 15) would pave the way towards 16.9316 (55-day SMA) and eventually 16.0365 (monthly low Jun 27).
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
