USD / TRY pushes higher and nears 8.45, focus is on US elections

• USD / TRY navigates new all-time highs near 8.45.
• Geopolitical and CBRT concerns continue to weigh on the lira.
• The focus is on Tuesday’s US presidential election.

The Turkish lira depreciates to new record lows against the US dollar and rises to USD/TRY around 8.45 at the beginning of the week.

USD / TRY looks at geopolitics, US elections

USD / TRY is extending the rally for yet another session on Monday, always on the back of the persistent deterioration of the Turkish currency, while investors’ bias towards safe havens also contributes to the bullish move.

Furthermore, no news from the Turkish central bank (CBRT) transforms into an additional loss of investor confidence both in the central bank and in the country. It was largely expected to generate some kind of emergency interest rate hike. However, President Erdogan’s comments over the weekend that the country is waging a war against “the diabolical triangle of interest rates and exchange rates and inflation” make any intervention by the CBRT an illusion ( being extremely optimistic).

Looking at the geopolitical front, there are no improvements either in the conflicts in the Caucasus or in the Eastern Mediterranean, where Turkey remains directly involved.

However, all attention will be on Tuesday’s US elections, as a Democratic victory could increase the possibility of US sanctions against Ankara following the purchase of the Russian defense system.

Meanwhile, the lira has already lost almost 30% so far this year.

Technical levels

At the moment, the pair is gaining 0.99% at 8.4370 and faces the next hurdle at 8.4393 (all-time high on Nov. 2). On the downside, a drop below 7.7787 (Oct 22 low) would expose 7.6294 (Oct 1 monthly low) and finally 7.5082 (Sept 25 low).