USD/TRY shrugs off CBRT intervention as inflation fears favor bulls near all-time high


  • USD/TRY remains sidelined after consolidating gains from record top the previous day.
  • CBRT intervenes, Turkish President Erdogan meets Central Bank Governor, FinMin but refrains from rate hike.
  • Risk-off mood underpins USD bulls amid Omicron fear, pre-Fed anxiety, Thursday’s CBRT meeting is the key.

USD/TRY pokes intraday high around $13.85, testing the previous day’s pullback from an all-time high during early Tuesday.

The Turkish lira (TRY) pair refreshed its record top to $14.65 on Monday as Turkey’s five-year Credit Default Swaps (CDS) jumped 13 basis points (bps). The run-up also took clues from the market’s risk-aversion wave ahead of the key central bank meetings and fears emanating from the South African covid variant called Omicron.

Following the slump in the TRY, Turkish President Recep Tayyip Erdoğan met the Governor of the Central Bank of the Republic of Turkey (CBRT) and the newly appointed Finance Minister (FinMin) Nureddin Nebati. The meeting preceded the central bank’s intervention that dragged USD/TRY from the all-time high.

However, Erdogan’s rejection to rate hikes and firmer inflation pressure in the economy keeps USD/TRY buyers hopeful. “Erdogan is standing firm on his policy of low borrowing costs, raising expectations for another rate cut when the Central Bank's monetary policy board meets Thursday. Adding to concerns, S&P Global Ratings lowered its outlook for Turkey's credit rating to negative from stable Friday, according to media reports,” said The Independent (UK).

Elsewhere, the market’s mood remains mixed, mostly downbeat, as traders await the key central bank meetings and the Omicron fears escalate. That said, the sour sentiment underpins traditional safe havens like the US government bonds, gold and the US dollar.

It should be noted, however, that Friday’s US Consumer Price Index (CPI) for November and the US inflation expectations, portrayed by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, challenge Fed hawks and weigh on the risk appetite.

On the other hand, the UK reports the first Omicron-linked death and Californian recall the mask mandate. Further, Australia’s largest state, population-wise, New South Wales (NSW) reports the highest daily virus infections tally in more than two months.

Against this backdrop, the US 10-year Treasury yields seesaw around 1.42% whereas the S&P 500 Futures rise 0.15% at the latest. Furthermore, shares in Japan, Australia, New Zealand and China trade mixed by the press time while the US Dollar Index (DXY) rises 0.06% intraday to 96.41 at the latest.

Looking forward, Wednesday’s Fed verdict and Thursday’s CBRT action will be important for the USD/TRY traders.

Read: Fed Preview: Dollar hinges on 2022 rate hike dots, guide to trading the grand finale of 2021

Share: Feed news

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


Recommended content

Editors’ Picks

AUD/USD recovers further toward 0.6800 on risk-recovery

AUD/USD recovers further toward 0.6800 on risk-recovery

AUD/USD extends recovery toward 0.6800 in Asian trading on Thursday, despite mixed Australian employment data. The Aussie cheers a return of risk appetite, which weighs on the post-Fed US Dollar recovery. All eyes now remain on US economic data for fresh impetus. 

AUD/USD News
USD.JPY reverses sharply from 144.00, as US Dollar recovery fizzles

USD.JPY reverses sharply from 144.00, as US Dollar recovery fizzles

USD/JPY is attacking 143.00 in Thursday's Asian session, reversing sharply from 144.00. The pair pares back gains in tandem with the US Dollar, as the latter's post-Fed recovery falters due to a rebound in risk sentiment. The focus is next on the US data due later today and Friday's BoJ decision. 

USD/JPY News
Gold price regains positive traction amid a modest USD pullback from one-week high

Gold price regains positive traction amid a modest USD pullback from one-week high

Gold price attracts some dip-buying during the Asian session on Thursday and seems to have stalled its retracement slide from the $2,600 mark, or a fresh all-time peak touched the previous day. The US dollar trims a part of its intraday gains to a one-week high, which turns out to be a key factor lending support to the commodity.

Gold News
Crypto leaders and Congress blast SEC over crypto regulations

Crypto leaders and Congress blast SEC over crypto regulations

In a meeting on Wednesday, several crypto leaders and congress members debunked the Securities and Exchange Commission's harsh regulatory approach toward the crypto industry.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures