USD/TRY rises to 7.35 post-CBRT decision on rates

USD/TRY resumes the upside and tests highs around 7.3500.
Fresh all-time highs are located just below 7.40 (August 17/18).
The CBRT left rates unchanged at 8.25% at its meeting on Thursday.

Pablo Piovano FXStreet

The Turkish currency is sharply lower vs. the greenback and lifts USD/TRY to fresh daily highs in the 7.35 region in the second half of the week.

USD/TRY bounces off 7.20

After testing lows in the vicinity of 7.20 on Wednesday, USD/TRY has now resumed the upside as market participants look disappointed following the Turkish central bank (CBRT) event.

In fact, the CBRT left the policy rate (one-week repo auction rate) unchanged at 8.25% at Thursday’s meeting vs. markets’ rising hopes of some kind of action in order to prevent the lira from weakening further (not even a small rate hike aimed at somehow restoring some confidence in the currency).

In fact, the central bank kept rates on hold and gave no fresh details regarding the sharp depreciation of the currency, let alone any measures aimed at supporting TRY.

While the lira keeps losing ground, all the attention seems to have now shifted to President Erdogan’s speech on Friday after he already anticipated the announcement of news that “will change an era” in Turkey.

USD/TRY key levels

At the moment the pair is gaining 0.93% at 7.3465 and faces the next hurdle at 7.3519 (high Aug20) seconded by 7.3980 (all-time high Aug.18). On the downside, immediate support is located at 7.2086 (low Aug.19) followed by 7.0023 (monthly high Jul.29) and finally 6.8139 (monthly low Jul.31).

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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