- USD/TRY adds to Monday’s gains near the 18.00 mark.
- The lira is down more than 25% so far this year.
- Türkiye’s unemployment rate will be next on the agenda.
the turkish lira depreciates for the second consecutive session and encourages the USD/TRY to flirt with the key barrier of 18.00 on Tuesday.
USD/TRY remains centered around 18.00
USD/TRY posts gains for the second consecutive session on Tuesday, while extending the auspicious start to the week.
The pair’s move higher contrasts with the prevailing selling pressure in the USD and the overall upbeat mood in the risk complex ahead of the release of key US inflation figures on Wednesday.
The lira, meanwhile, lost more ground after gains in the second half of last week, especially in response to Friday’s news that the country’s foreign exchange reserves rose to a two-month high of around 9.12 billion. dollars in the week until July 29.
On the national calendar, attention remains focused on the publication of the unemployment rate and the year-end CPI forecast, on Wednesday and Friday, respectively.
What to keep in mind around TRY
The bullish bias in USD/TRY remains unchanged and remains on track to revisit the key 18.00 zone.
Meanwhile, the lira is expected to continue oscillating around developments in energy and commodity prices – which are directly correlated to the events of the war in Ukraine – general trends in appetite for risk and the path of the Fed rates in the coming months.
Additional risks facing the Turkish currency also come from within, as inflation shows no signs of abating (despite rising less than expected in July), real interest rates remain entrenched in negatives and political pressure for the CBRT to go for low interest rates remains pervasive. 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 0.16% at 17.9302 and faces the immediate target of 17.9874 (3rd Aug 2022 high) seconded by 18.2582 (all-time high Dec 20th) and then 19.00 (round level). On the other hand, a break of 17.1903 (weekly low Jul 15) would pave the way towards 16.1867 (100-day SMA) and eventually 16.0365 (monthly low Jun 27).
Source: Fx Street
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