USD/TRY offered, looks side-lined below 7.0000
|- USD/TRY is down smalls below the key 7.0000 mark.
- The lira keeps the bid bias unchanged so far on Friday.
- The CBRT reinforced the tighter monetary policy stance on Thursday.
The upbeat sentiment around the Turkish currency remains everything but abated for yet another session, with USD/TRY extending the consolidative mood below the 7.0000 mark on Friday.
USD/TRY bolstered by CBRT
USD/TRY sheds ground for the third consecutive session so far on Friday, adding to the recent inconclusive price action although still navigating in sub-7.0000 levels.
In fact, investors’ view on the lira remains constructive and this stance was exacerbated after the Turkish central bank (CBRT) left the One-Week Repo Rate unchanged at 17.00% at Thursday’s meeting.
The central bank also reinforced the case for the continuation of the tight monetary conditions into the next months, always with the immediate aim at bringing down the domestic inflation and restore financial stability.
In the meantime, TRY is the best EM FX performer, up nearly 7% vs. the greenback this year and currently navigating the fourth consecutive month with gains.
What to look for around TRY
The lira remains bid and manages to extend the decline below the psychological 7.00 mark. The much-improved sentiment around the currency comes after the CBRT once again reiterated its commitment to fight high inflation via the current orthodox approach of the monetary conditions. Additionally, the CBRT appears to have regained some lost credibility/independence during the past months and this is no minor issue considering the well-known opinion of President Erdogan when comes to higher interest rates. The lira will closely follow this theme in 2021 along with the Biden’s Administration stance on Turkey, the post-pandemic recovery and occasional bouts of geopolitical effervescence.
Eminent issues on the back boiler: Potential US sanctions against Ankara. Government pressure on the CBRT vs. bank’s credibility. Bouts of geopolitical concerns. Much-needed structural reforms. High inflation.
USD/TRY key levels
At the moment the pair is retreating 0.13% at 6.9561 and a drop below 6.8923 (2021 low Feb.16) would expose 6.8796 (monthly low Aug.4 2020) and then 6.6834 (monthly low Jun.3 2020). On the other hand, the next hurdle is located at 7.1379 (21-day SMA) followed by 7.3632 (200-day SMA) and finally 7.5415 (2021 high Jan.18).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.