USD/TRY turns negative below 5.70, focus on economic reforms


  • TRY fades the initial pessimism, back around 5.6800.
  • FinMin B.Albayrak announced reforms focused on financial sector.
  • Turkey Current Account results due tomorrow.

After testing fresh 2-day highs above the 5.7200 handle, USD/TRY has come under some selling pressure and has now receded to sub-5.7000 levels, turning negative for the day.

USD/TRY lost ground post-reforms

The Turkish Lira is now trading on a firmer note as market participants continue to digest the recently announced reforms, mainly aimed to the banking and financial sector.

In fact, FinMin B.Albayrak announced the government will give top priority to structural reforms with the main focus on the exports sector. In addition, the government is expected to aid banks’ lending by injecting fresh money via new issuance of bonds, while the creation of a special fund will target the debt in the construction and energy sectors.

The domestic production of food will also be in the limelight, as imported food has been a source of higher inflation amidst the weakening of the Lira in past months. In this regard, the government aims to reform the agricultural sector as well.

In addition, Albayrak said a new pension system could be announced in the next months, all amidst the continuation of the tight stance in the fiscal policy.

Moving forward, Turkish Current Account figures for the month of February are due tomorrow.

What to look for around TRY

The Lira is expected to remain under pressure in the near to medium terms, always tracking the performance of the risk-associated complex and specifically around the EM FX universe. In addition, market participants will remain vigilant on the implementation and progress of the structural reforms announced earlier today, conditio sine qua non for the start of a sustainable economic recovery and a return of the confidence in both the currency and the country. However, the geopolitical factor involving US and Israel and the issues around the country’s intention to buy a Russian missile defence system could open the door for US sanctions, putting the Lira under extra pressure.

USD/TRY key levels

At the moment the pair is losing 0.05% at 5.6849 and a break below 5.6055 (10-day SMA) would open the door to 5.5128 (200-day SMA) and then 5.2918 (low Mar.26). On the other hand, the next hurdle emerges at 5.7284 (high Apr.8) seconded by 5.8413 (2019 high Mar.22) and finally 5.8707 (high Oct.23 2018).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends its gains toward 1.1300 after the dovish Fed decision

EUR/USD has extended its gains after the Fed opened the door to cutting interest rates, stating that uncertainties have increased. Markets are awaiting EU leaders to divvy up top jobs.

EUR/USD News

GBP/USD falls after the dovish BOE statement

GBP/USD retreats below 1.2700. after the BOE downgraded Q2 forecasts, sees increasing signs of wage growth leveling off, and notes downside risks have increased. However, they remain on course to tighten policy.

GBP/USD News

USD/JPY rebounds from multi-month lows, continues to trade below 108

Fed's dovish shift continues to weigh on the greenback. 10-year US Treasury bond yield plummets to lowest level since November 2016. Wall Street looks to open sharply higher on Thursday.

USD/JPY News

Gold eases from multi-year tops, still well bid near $1380 level

Gold built on the post-FOMC upsurge and rallied to near six-year tops during the Asian session on Thursday, albeit retreated a bit thereafter.

Gold News

FOMC: Prelude to a rate cut?

The Federal Reserve added little new to its policy prescript in Wednesday’s FOMC statement and economic projections and with the anticipation for a July rate cut long priced into market levels the reaction was decidedly uninvolved.

Read more

Majors

Cryptocurrencies

Signatures