- USD/TRY extends further the breakdown of 7.0000.
- The CBRT left the monetary policy unchanged on Thursday.
- The central bank reinforces its tight stance for the next months.
The Turkish lira extends the upside momentum and drags USD/TRY to the proximity of 6.9000, where some initial support has emerged.
USD/TRY weaker post-CBRT
USD/TRY loses ground for the second session in a row on Thursday and trades at shouting distance from the 2021 lows just below 6.9000 recorded earlier in the week.
TRY gains extra pace after the Turkish central bank (CBRT) left the One-Week Repo rate unchanged at 17.00% at its event on Thursday. The move, while largely anticipated by market participants, comes to reinforce the orthodox shift by the monetary authority announced back in November 2020 and the continuation of the tight monetary stance in the country.
Earlier in the session, Turkey’s Consumer Confidence ticked higher to 84.5 for the current month (from 83.3).
What to look for around TRY
The lira remains bid and manages to extend the decline below the psychological 7.00 mark. The much-improved sentiment around the currency comes after the CBRT once again reiterated its commitment to fight high inflation via the current orthodox approach of the monetary conditions. Additionally, the CBRT appears to have regained some lost credibility/independence during the past months and this is no minor issue considering the well-known opinion of President Erdogan when comes to higher interest rates. The lira will closely follow this theme in 2021 along with the Biden’s Administration stance on Turkey, the post-pandemic recovery and occasional bouts of geopolitical effervescence.
Eminent issues on the back boiler: Potential US sanctions against Ankara. Government pressure on the CBRT vs. bank’s credibility. Bouts of geopolitical concerns. Much-needed structural reforms. High inflation.
USD/TRY key levels
At the moment the pair is retreating 0.26% at 6.9495 and a drop below 6.8923 (2021 low Feb.16) would expose 6.8796 (monthly low Aug.4 2020) and then 6.6834 (monthly low Jun.3 2020). On the other hand, the next hurdle is located at 7.1567 (21-day SMA) followed by 7.3632 (200-day SMA) and finally 7.5415 (2021 high Jan.18).
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.
Recommended content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.