- USD/TRY reverses Friday’s losses and retests 14.90.
- Risk sentiment continues to weigh on the dollar.
- The CBRT is expected to leave rates unchanged this week.
The TRY trims early gains and now pushes the USD/TRY in the vicinity about 15.00 on Monday.
USD/TRY: Upside capped by 15.00
The USD/TRY leaves Friday’s inconclusive price action behind and resumes rally despite weakening USD tone and sharp drop in crude oil prices.
In fact, the Turkish lira fails to capitalize on the improved mood in the risk space and remains under pressure, while redirecting 2022 highs around 15.00 recorded on March 11.
Going forward, the lira is expected to remain under pressure considering the FOMC and Turkish central bank (CBRT) events on Wednesday and Thursday, respectively. Against that, the consensus still points to a 25bp interest rate hike by the Fed, while the CBRT is seen to keep the one-week repo rate unchanged at 14.00%.
What to look for around TRY
The lira resumed the downward trend of past sessions, leaving behind three months of consolidated behavior. The lira’s further depreciation came in response to rising crude prices following the deteriorating geopolitical outlook in Ukraine coupled with the prospect that the Fed will start raising rates as soon as this week. Inflation shows no sign of abating, real interest rates remain negative, and political pressure to keep the CBRT biased toward low interest rates remains pervasive.
Additional technical levels
So far the pair is gaining 0.20% at 14.8056 and a drop below 13.7143 (25 Feb low) would expose 13.5091 (18 Feb low) and finally 12.4317 (11 Feb low). On the other hand, the next upside barrier lines up at 14.9889 (11 Mar 2022 high) followed by 18.2582 (20 Dec all-time high) and then 19.00 (round level).
Source: Fx Street
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