- USD / TRY is posting modest gains and is targeting a test of 14.0000.
- So far, the pair appears to be lateralized between 13.00 and 14.00.
- Turkey’s unemployment rate remained at 11.2% in November.
The Turkish lira depreciates further and pushes the USD/TRY near the 14.00 zone at the beginning of the trading week.
USD / TRY remains capped at 14.00… for now
USD / TRY resumed its rally albeit at a slow pace on Monday, while managing to outrun the unfinished price action on Friday.
Despite starting the new year on a positive footing, the lira quickly returned to normal and depreciated to near the 14.00 zone against the US dollar in subsequent sessions, in the usual context of greater fragility and uncertainty around the next steps of the Turkish central bank, at a time when politics could intensify its pressure on monetary policy.
Indeed, investors’ attention could shift to the political arena, where speculation of previous presidential and parliamentary elections (originally scheduled for late June 2023) appears to have accelerated in the context of the latest poll results showing that support for President Erdogan waned somewhat.
On the national calendar, Turkey’s unemployment rate was unchanged at 11.2% in November, while the employment rate improved slightly to 46.6% in the same period.
What to look for around TRY
The pair’s ongoing recovery appears to have encountered strong initial resistance at the 14.00 zone so far. Higher-than-expected inflation figures released earlier in the year put the lira under additional pressure combined with some cracks in confidence among Turks regarding the government’s recently announced plan to promote de-dollarization of the economy. Meanwhile, the reluctance of the CBRT to change course (collision?) And the ever-present political pressure to favor lower interest rates in the current context of rampant inflation and (very) negative real interest rates are predicted to keep the currency going. national under intense pressure at the moment.
Technical levels
So far, the pair is gaining 0.33% at 13.8620 and a drop below 12.7523 (weekly low on Jan 3) would pave the way for a test of 12.0478 (55-day SMA) and finally 10.2027 (monthly low on Jan 23). December). On the other hand, the next rising barrier lines up at 13.9319 (Jan 10 high) followed by 18.2582 (Dec 20 all-time high) and then 19.0000 (round level).
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