USD/TRY in weekly tops near 8.3500


  • USD/TRY climbs further to the vicinity of 8.3500.
  • Turkey plans to ease lockdown restrictions in the next weeks.
  • Investors’ attention remains on the CBRT meeting on Thursday.

The Turkish currency depreciates to new multi-day lows vs. the dollar and lifts USD/TRY to fresh peaks around 8.3500.

USD/TRY targets 8.4000 near-term

USD/TRY leaves behind the daily pullback recorded at the beginning of the week, as sellers regain control of the sentiment around the Turkish lira and the dollar retakes the upper hand in the global markets.

Indeed, the firmer demand for the dollar – despite diminishing yields – puts the EM FX space under pressure, always on the back of the increasing optimism on the US economic recovery in the post-pandemic era.

On the domestic front, latest news cites the country could start easing some restrictions once the ongoing 17-day lockdown, which started on April 29, finishes. In fact, both daily cases of coronavirus and hospitalizations are seeing a sharp decline from previous days, which opens the door to a gradual resumption of activities in the wake of the current lockdown.

In the meantime, cautiousness among market participants is expected to gradually dominate the scenery around the lira as markets get closer to the Turkish central bank (CBRT) event later in the week.

What to look for around TRY

The near-term outlook for the lira remains fragile to say the least. Despite keeping rates unchanged at the latest meeting, Governor S.Kavcioglu is gradually expected to reverse (wipe out) the shift to a market friendly approach of the monetary policy that was successfully implemented by former Governor N.Agbal back in November 2020. Against this, it will surprise nobody to see the CBRT returning to the unorthodox/looser monetary stance in the next months, opening the door to further lira depreciation, FX reserves exodus and rising bets on a Balance of Payment crisis. Against this backdrop, it will surprise nobody to see spot trading around 10.00 in the medium-to-longer run.

Key events in Turkey this week: End of Year CPI Forecast (Wednesday) – CBRT Interest Rate decision (Thursday).

Eminent issues on the back boiler: Potential US/EU sanctions against Ankara. Government pressure on the CBRT vs. bank’s credibility/independence. Bouts of geopolitical concerns. Much-needed structural reforms. Growth outlook vs. progress of the coronavirus pandemic. Capital controls? The IMF could step in to bring in financial assistance.

USD/TRY key levels

At the moment the pair is advancing 0.83% at 8.3159 and faces the next up barrier at 8.3464 (weekly high May 4) followed by 8.4840 (2021 high Apr.26) and then 8.5777 (all-time high Nov.6 2020). On the other hand, a drop below 8.1316 (weekly low Apr.29) would aim for 7.9937 (weekly low Apr.15) and then 7.8837 (50-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.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD skyrockets to 1.2150 on poor US jobs figures

EUR/USD has hit a new multi-month peak above 1.2150 after the US reported an increase of only 266,000 jobs in April against nearly one million expected. The dollar is under immense pressure. 

EUR/USD News

GBP/USD soars toward 1.40 after disappointing Nonfarm Payrolls

GBP/USD has been extending its gains after the US Nonfarm Payrolls badly disappointed with an increase of only 266,000 jobs in April, nearing 1.40. Earlier, sterling benefited from the UK Conservative Party's gains in local elections. 

GBP/USD News

XAU/USD soars above $1,835 after weak Nonfarm Payrolls

Gold has leaped above $1,835 after the US reported an increase of only 266K jobs in April, far below expectations. Lower US yields support the precious metal.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Forex MAJORS

Cryptocurrencies

Signatures