• USD/TRY picks up bids to reverse early-day losses, keeps previous day’s rebound from three-week low.
  • Fears of higher inflation in Turkey recall pair buyers ahead of the key ECB Forum event.
  • Turkey’s agreement to lift opposition over Sweden and Finland’s joining of NATO probe upside moves.
  • Fed’s Powell needs to defend hawkish policies and hint at something more to keep USD on the front foot.

USD/TRY extends the previous day’s recovery moves to 16.67 during early Wednesday morning in Europe. The Turkish lira (TRY) pair’s latest rebound could be linked to the fresh fears of higher inflation in Turkiye, as well as a cautious mood ahead of important monetary policy discussions among the central bankers from the US, the UK and the European Union (EU) at the ECB Forum.

That said, the latest Reuters poll said that Turkiye's inflation is expected to rise above 78% in June and it was seen declining to just below 70% by end-2022. The survey also mentioned the reason by stating, “As pricing behavior deteriorates across the board due to a weak currency and a loose monetary policy.”

It’s worth noting that the nation’s Consumer Price Index (CPI) rallied to 73.5% in May while refreshing a multi-year high. However, President Recep Tayyip Erdogan refrains from rate hikes and rather pushes qualitative measures termed as ‘liralization’ to defend the national currency. The next reading for Turkish CPI will be for May and will be out on Monday.

On the other hand, a jump in the one-year US consumer inflation expectations joined hawkish Fed bets to renew the US dollar’s safe-haven demand. The US Conference Board (CB) Consumer Confidence Index dropped for the second consecutive month in June, to 98.7 versus 100.0 expected and 103.2 in May. In doing so, the widely followed consumer sentiment gauge dropped to the lowest level since February 2021. Further details revealed that the one-year consumer inflation rate expectations climbed to 8% from May's revised print of 7.5. It should be noted that the US trade deficit dropped to the lowest in a year, to $104.3 billion, per the latest release for May.

It should be noted that Turkey’s step back from a hard stand over Sweden and Finland’s joining of North Atlantic Treaty Organization (NATO) challenge the USD/TRY buyers. On the same line could be the recently softer US Treasury yields amid recession fears.

Looking forward, the US Core Personal Consumption Expenditure (PCE) for Q1 2022, expected to remain unchanged at 5.1%, will be important. On the same line will be the final readings of the US Q1 GDP, which is likely to confirm a 1.5% Annualized contraction. Above all, the central bankers’ discussions at the ECB Forum will be the key for the market players to watch for clear directions.

Technical analysis

The USD/TRY pair’s corrective pullback remains elusive until crossing the previous support line from early May, around 17.00 by the press time. Alternatively, 50-DMA restricts the immediate downside of the pair at around 16.07.

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD slides towards 0.6900 on a big miss on Australian jobs

AUD/USD slides towards 0.6900 on a big miss on Australian jobs

AUD/USD is tumbling towards 0.6900, as a big miss on the Australian headline jobs data smashed the aussie dollar. Softer wage and employment data will likely dissuade the RBA from aggressive tightening. Investors assess Fed minutes and US-Taiwan news. 

AUD/USD News

EUR/USD: Bulls have a bumpy road ahead, 1.0210 guards immediate recovery

EUR/USD: Bulls have a bumpy road ahead, 1.0210 guards immediate recovery

EUR/USD recovery remains sluggish at around 1.0180 as bulls approach the short-term key hurdles during Thursday’s Asian session. Even so, steady RSI and an upward sloping support line from late July challenge the bears. 

EUR/USD News

Gold reverses Fed Minutes inspired gains, $1,735 in focus

Gold reverses Fed Minutes inspired gains, $1,735 in focus

Gold remains pressured around two-week low, down for the fourth consecutive day. Fed Minutes signalled policymakers’ support for restrictive rates despite suggesting a retreat from faster rate hike before long. US data, economic fears added to the market’s favor for the US dollar, weighing on XAU/USD.

Gold News

Shiba Inu on fire, another price rally around the corner?

Shiba Inu on fire, another price rally around the corner?

Shiba Inu yielded nearly 50% to SHIB holders over the past week, outperforming Bitcoin and most other cryptocurrencies. Money services firm BitWallet listed Shiba Inu, boosting the meme coin’s adoption among users. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures