- USD/TRY extends the break of the 17.00 level.
- The lira remains weak in line with the rest of the risk space.
- All attention is on the current account for May and the year-end CPI forecast for the month of July tomorrow, Friday.
Another day, another drop in the Turkish lira, and this time raising the USD/TRY above 17.00 recently broken.
USD/TRY rises on dollar strength
USD/TRY advances for the sixth consecutive session so far, already gaining 8% from lows near 16.00 on June 27, in response to the announcement by the Turkish banking watchdog (BDDK) to ban lending in lira to certain companies. with strong currency positions.
Meanwhile, the strong bullish momentum in the USD continues to weigh on the risk complex and EM FX universe, putting TRY under additional selling pressure.
The absence of releases on Thursday from Turkey should leave all attention on Friday’s release of the current account for May and the year-end CPI forecast for July.
It should be remembered that the markets of Turkey will close earlier on Friday to celebrate the Eid-al-Adha holiday.
What to keep in mind around TRY
USD/TRY continues to head north – and the lira continues to give up gains – after bottoming out at the 16.00 area in late June as investors seem to have digested the latest BDDK announcement.
So far, lira price action is expected to continue to revolve around energy price action, broad trends in risk appetite, the Fed rate path and developments from the war in Ukraine.
In addition, the effects of this new measure aimed at supporting the de-dollarization of the economy will also have their say, at least in the very short term.
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.
key levels
So far the pair is gaining 0.32% at 17.2441 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 15.4281 (100-day SMA).
Source: Fx Street
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