USD/TRY: Upside falters just ahead of 14.0000… for now

USD/TRY extends the rebound to the 14.00 area on Monday.
Turkish headline CPI rose 13.58% MoM, 36.08% YoY in December.
Turkish Manufacturing PMI improved a tad to 52.10 last month.

Pablo Piovano FXStreet

The Turkish lira extends the rout and pushes USD/TRY to fresh 2-week peaks in levels just shy of the 14.00 hurdle on Monday.

USD/TRY stronger on higher CPI

USD/TRY advances for the sixth consecutive session on Monday in response to a resumption of buying interest in the greenback and further domestic headwinds facing the lira.

TRY suffered another bout of selling pressure after Turkey’s inflation figures showed the CPI rose at a shocking 13.58% MoM in December and 36.08% from a year earlier, while the Core CPI gained 31.88% over the last twelve months.

The lira continues to give back part of the strong gains recorded soon after the government announced a plan aimed at preventing further dollarization of its economy in past days, as enthusiasm among Turks continues to fizzle out.

Economic data from Turkey showed Producer Prices rose 19.08% on a monthly basis and 79.89% over the last twelve months and a slight improvement in the Manufacturing PMI to 52.10 in December.

What to look for around TRY

The lira resumed its downtrend in past sessions, as markets (and Turks) appeared to digest the recently announced government measures to promote the shift from dollars to the domestic currency. The CBRT's reluctance to change (collision) course and the omnipresent political pressure to favour lower interest rates in the current context of rampant inflation are forecast to keep the lira under persistent pressure. Another visit to the all-time high north of the 18.00 mark in USD/JPY should not be ruled out just yet.

Key events in Turkey this week: December Inflation Rate, Producer Prices, Manufacturing PMI (Monday).

Eminent issues on the back boiler: Progress (or lack of it) of the new scheme oriented to support the lira. Constant government pressure on the CBRT vs. bank’s credibility/independence. Bouts of geopolitical concerns. Much-needed structural reforms. Growth outlook vs. progress of the coronavirus pandemic. Potential assistance from the IMF in case another currency crisis re-emerges.

USD/TRY key levels

The pair is gaining 1.15% at 13.3675 and a drop below 11.6665 (55-day SMA) would open the door to 10.2027 (monthly low Dec.23) and finally 9.3734 (200-day SMA). On the other hand, the next up barrier lines up at 18.2582 (all-time high Dec.20) followed by 19.0000 (round level).

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.

EUR/USD: US Dollar comeback in the makes?

The US Dollar stands victorious at the end of another week, with the EUR/USD pair trading near a four-week low of 1.1742, while the USD retains its strength despite some discouraging American data released at the end of the week. The pair edged higher on Friday, after the United States Supreme Court ruled against President Donald Trump's tariffs, although the advance is not enough to change the latest USD flow.

GBP/USD braces for more pain, as 200-day SMA tested

GBP/USD broke the previous week’s consolidation to the downside, as sellers returned with pomp, smashing the major back toward the levels last seen in late January. The pair tested bids below the 1.3450 barrier as the US Dollar strength largely played out throughout the week, while the Pound Sterling stepped back on expectations of divergent monetary policy outlooks between the Bank of England and the US Federal Reserve.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.

Week ahead: Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness. Yen and aussie diverge; both pound and euro could recoup their losses.

Broadening drivers of growth: Unpacking GDP and looking ahead

This week’s data delivered a familiar theme with an important twist. The U.S. economy continues to be shaped by powerful forces in high-tech and AI-related investment, but recent releases suggest the growth story may finally be broadening. At the same time, trade flows are moving in a less supportive direction, reminding us that not all parts of the economy are pulling in sync.

Ripple bulls defend key support amid waning retail demand and ETF inflows

XRP ticks up above $1.40 support, but waning retail demand suggests caution. XRP attracts $4 million in spot ETF inflows on Thursday, signaling renewed institutional investor interest.