USD/TRY climbs to 3-day highs around 8.6000


  • USD/TRY reverses part of recent losses, back around 8.60.
  • Turkey’s Consumer Confidence eased to 79.5 in July.
  • Markets in Turkey will be closed this week due to holiday.

The Turkish lira gives away part of the recent gains and lifts USD/TRY back to the 8.6000 region at the beginning of the week.

USD/TRY up on dollar gains, risk aversion

The perseverant risk aversion lends extra support to the dollar in detriment of the riskier assets/high yielders on Monday. The move in the buck encourages the pair to reverse six consecutive daily pullbacks and bounce off lows in the key 8.50 zone (July 16).

The recent (unusual?) strength in the lira appears propped up by the so far tight stance from the Turkish central bank (CBRT), which left the One-Week Repo Rate unchanged at 19.00% for the fourth consecutive month last week. The CBRT’s statement reiterated the bank’s commitment to fight the current high inflation and that the policy rate will be set above the inflation rate.

It is worth recalling that inflation in Turkey unexpectedly edged higher in June vs. speculations that consumer prices could have already peaked earlier in the year. Investors continue to pencil in the resumption of the easing cycle by the CBRT at some point towards the end of the current year.

In the domestic calendar, Turkey’s Consumer Confidence receded to 79.5 for the current month (from 81.7).

On another front, the Turkish stock market will be closed the rest of the week due to the Eid-al-Adha holiday.

USD/TRY key levels

So far, the pair is gaining 0.75% at 8.5706 and faces the next hurdle at 8.6733 (monthly high Jul.8) followed by 8.7974 (all-time high Jun.25) ahead of 9.0000 (round level). On the downside, a drop below 8.4928 (monthly low Jul.16) would aim for 8.2803 (monthly low Jun.11) and finally 8.2613 (100-day SMA).

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