USD/TRY struggles near six-month low as Turkey’s geopolitical risks battle US dollar weakness

USD/TRY stays depressed near August 2020 lows, marked last Thursday.
Turkey hints ‘painful revenge, swift justice’ in a fight against PKK in Iraq.
US dollar fails to defy risk-on mood amid stimulus hopes, vaccinations.
Turkish Budget Balance, geopolitical headlines can entertain traders amid off in the US.
USD/TRY remains mildly offered, down 0.13% intraday, near August 2020 trough while declining to 7.0260 during early Monday. In doing so, the quote struggles for a clear direction amid mixed signals of geopolitical tension at home and the broad weakness of the US currency during the inactive market hours ahead of the European session.

Anil Panchal FXStreet

Turkish government conveyed the execution of 13 Turks, comprising military and police personnel by Kurdistan Workers Party (PKK) in Iraq, per Reuters. The news also quotes Defence Minister Hulusi Akar unveiling the operation details as “Forty-eight PKK militants were killed during the military operation, while three Turkish soldiers were killed and three wounded.”

The age-old fight between the Turkish government and the outlawed PKK should have propelled the quote. However, the US dollar weakness, mainly due to the hopes of a $1.9 trillion covid relief package and optimism concerning the coronavirus (COVID-19) vaccines, seems to have favored the USD/TRY bears.

That said, S&P 500 Futures and stocks in Asia-Pacific print risk-on mood whereas the US dollar index (DXY) declines 0.13% by press time.

Moving on, Turkish Budget Balance for January, prior -40.7B, can offer immediate direction but the bears are less likely to recede the controls amid a likely easy start to the week.

Technical analysis

A two-month-old downward sloping trend line, currently around 7.2215, directs USD/TRY towards July 2020 tops surrounding 6.9080.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD risks a deeper drop below 1.1750

EUR/USD keeps its vacillating mood in place as the the NA session drwas to a close on Tuesday, hovering below the 1.1800 hurdle amid acceptable gains in the US Dollar. In the meantime, market participants and the FX galaxy are expected to closely follow President Trump’s SOTU speech around 2AM GMT.

GBP/USD regains 1.3500 and above

GBP/USD extends its advance for the third day in a row on Tuesday, this time retesting the area beyond the 1.3500 hurdle. Cable’s uptick comes despite decent gains in the Greenback and the dovish message from the BoE’s Bailey at the UK Parliament.

Gold appears offered around $5,150

Gold is giving back a good portion of the recent multi-day rally, receding to the $5,150 zone per troy ounce amid the decent bounce in the US Dollar and mixed US Treasuty yields. In the meantime, markets’ attention remain on upcoming comments from Fed speakers.

Ripple’s DeFi shift in focus: Navigating XRPL EVM sidechain growth, XRPFi migration and liquidity

Ripple (XRP) has continued to trade under pressure, extending its decline by approximately 63% from the record high of $3.66 in July. The remittance token is trading above support at $1.35, while its upside appears limited by key supply zones, starting with $1.40, at the time of writing on Tuesday.

The Citrini report: How a debatable AI narrative can shake Wall Street

That AI-related headline alone was enough to rattle investors.US stocks slid sharply on Monday after a widely circulated Citrini Research memo outlined a hypothetical “2028 Global Intelligence Crisis”, warning that rapid AI adoption could push US unemployment into double digits as early as by mid-2028.

XRP pressured by weak ETF flows and declining retail interest

Ripple (XRP) is edging lower, trading above its intraday low of $1.32 at the time of writing on Tuesday. The decline from its weekly opening of $1.39 reflects heightened volatility in the broader cryptocurrency market, accentuated by tariff-triggered uncertainty.