- USD/TRY gathers upside traction near 5.90.
- Turkey continues its military campaign in Northern Syria.
- Potential US sanctions against Turkey weigh on the Lira.
The Turkish currency remains under pressure so far on Thursday and is now pushing USD/TRY to fresh 6-week highs in the vicinity of 5.90.
USD/TRY focused on geopolitics, sanctions
TRY remains under pressure as the probability of US sanctions against the country still linger, particularly after President R.T.Erdogan announced on Wednesday the start of the military advance into Northern Syria under operation ‘Peace Spring’.
According to Erdogan, the military campaign aims to fight terrorist groups who operate in the so-called ‘terror corridor’ across the southern border of Turkey.
On the domestic front, and according to latest news, concerns remain on the rise after the Turkish police force commenced to suppress social media content that could be against the military operation.
What to look for around TRY
The Turkish Lira has exacerbated its depreciation in past sessions in response to geopolitical concerns and the probability of sanctions after the country has embarked into a military campaign in Northern Syria. On another front, TRY has digested very well the two consecutive (massive) interest rate cuts by the CBRT since President R.T.Erdogan appointed M.Uysal as Governor, although investors remain sceptical of further strength in the currency in light of a still debatable ability of the country to embark on a more sustainable growth path (Erdogan set a target of 5% GDP growth in 2020) and to implement the much needed structural reforms, which remain crucial to bring in more stability to the currency and sustainability to domestic fundamentals. On the broader view, TRY looks supported by the ‘hunt for yield’, positive headlines from the US-China trade developments and prospects of extra interest rate cuts by the Federal Reserve.
USD/TRY key levels
At the moment the pair is gaining 0.32% at 5.8890 and a surpass of 5.9416 (61.8% Fibo of the May-August drop) would open the door to 6.0027 (monthly high Aug.26) and then 6.0753 (78.6% Fibo of the May-August drop). On the other hand, the next support emerges at 5.7536 (38.2% Fibo of the May-August drop) followed by 5.6853 (55-day SMA) and finally 5.6434 (200-day SMA).
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.