USD/TRY recedes from 2020 peaks near 7.4000

USD/TRY reached fresh all-time highs just below 7.40.
No respite in the bearish note surrounding the Turkish currency.
CBRT meeting takes centre stage later in the week.

Pablo Piovano FXStreet

Another day, another all-time lows in the Turkish lira vs. its American peer. Indeed, USD/TRY climbed to fresh highs in levels just shy of the 7.40 mark earlier on Tuesday.

USD/TRY now looks to CBRT

The Turkish lira has started the week in the same fashion that closed the previous one: negative.

Indeed, USD/TRY is advancing for the fourth consecutive week so far, shedding some ground after climbing to the boundaries of 7.40 during early trade on Tuesday.

Not even the sharp sell-off in the greenback has prevented the lira from depreciating further, losing already more than 6% so far this month. In addition, the outlook for TRY looks darker by the day amidst the persistent effort from domestic lenders to sustain the exchange rate via selling FX reserves, prospects of rising inflation and the continuous deterioration of Turkey’s external position.

Later in the week, all the attention will be on the Turkish central bank (CBRT), as investors are expected to closely follow any announcement of measures aimed at preventing the lira from bleeding further. Consensus sees the CBRT keeping rates on hold and probably leaving a (much-needed?) rate hike for subsequent meetings.

USD/TRY key levels

At the moment the pair is gaining 0.02% at 7.3706 and faces the next hurdle at 7.3980 (all-time high Aug.18). On the downside, immediate support is located at 7.1864 (low Aug.11) followed by 6.9272 (55-day SMA) and finally 6.8796 (monthly low Aug.4).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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