Even after raising interest rates during its MPC (Monetary Policy Committee) on 13 September, the CBRT (Central Bank of Turkey) failed to convince market participants sufficiently. Key issues relating to spreading inflation, shown by the September CPI (Consumer Price Index) at 24.52% on a yearly basis (m/m: +10.88%) and expected to head above 25% by year end, along with the question of the independence of the CBRT, have put constant pressure on the Turkish lira. But the trend appears to be changing.

Indeed, after the Turkish authorities complied with US demands to release Pastor Andrew Brunson following a court decision last week, the lira has been gaining ground since last Thursday, trading below the 6 range against the greenback and appreciating by 4.75% since then. For now, it appears that investors have finally decided to support the lira, although the forthcoming CBRT MPC meeting of 25 October could turn out differently than expected. Investors are expecting a 300 bps rate hike. If the central bank disappoints, the risk of an extra collapse of the Turkish lira has not disappeared.


Stay on top of the markets with Swissquote’s News & Analysis

 


Accordingly, it appears that the TRY trend is tending towards further strength, as the Turkish government is working with the US to investigate the case of the missing Saudi Arabian journalist Jamal Khashoggi. The upcoming visit to Turkey by US Secretary of State Mike Pompeo will confirm the easing of tension between both nations, thus giving further relief to the lira.

USD/TRY is trading along 5.79, approaching the 5.74 range.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD following higher than expected Aussie Unemployment Rate

AUD/USD fails to cheer an increase in Employment Change. The pair declines to 0.6678 after flashing the intra-day low of 0.6668 as Australia’s employment data disappoints Aussie traders on early Thursday.

AUD/USD News

USD/JPY bulls catch a breath near multi-month top, stays above 111.00

USD/JPY seesaws around 111.30 at the start of Asian session. The risk barometer surged to the highest in nine months the previous day as Chinese authorities manage to placate traders. The pair consolidates gains following FOMC minutes.

USD/JPY News

Gold breaks to near 7-year highs amid coronavirus fears, next target is $1,617

Gold prices have extended their gains and have topped $1,611.42, the previous 2020 peak. XAU/USD is now trading at the highest levels since March 2013. Back then, it hit a high of $1,617, which is the next upside target.

Gold News

WTI upside remains capped by $53.00 ahead of API

WTI oil stays upbeat, following the run-up to the monthly high before a few minutes, as taking rounds to $53.70 amid the initial Asian session on Thursday. The black gold recently benefited from the weekly inventory data from the API.

Oil News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors

Cryptocurrencies

Signatures