- USD/TRY is down smalls below the key 7.0000 mark.
- The lira keeps the bid bias unchanged so far on Friday.
- The CBRT reinforced the tighter monetary policy stance on Thursday.
The upbeat sentiment around the Turkish currency remains everything but abated for yet another session, with USD/TRY extending the consolidative mood below the 7.0000 mark on Friday.
USD/TRY bolstered by CBRT
USD/TRY sheds ground for the third consecutive session so far on Friday, adding to the recent inconclusive price action although still navigating in sub-7.0000 levels.
In fact, investors’ view on the lira remains constructive and this stance was exacerbated after the Turkish central bank (CBRT) left the One-Week Repo Rate unchanged at 17.00% at Thursday’s meeting.
The central bank also reinforced the case for the continuation of the tight monetary conditions into the next months, always with the immediate aim at bringing down the domestic inflation and restore financial stability.
In the meantime, TRY is the best EM FX performer, up nearly 7% vs. the greenback this year and currently navigating the fourth consecutive month with gains.
What to look for around TRY
The lira remains bid and manages to extend the decline below the psychological 7.00 mark. The much-improved sentiment around the currency comes after the CBRT once again reiterated its commitment to fight high inflation via the current orthodox approach of the monetary conditions. Additionally, the CBRT appears to have regained some lost credibility/independence during the past months and this is no minor issue considering the well-known opinion of President Erdogan when comes to higher interest rates. The lira will closely follow this theme in 2021 along with the Biden’s Administration stance on Turkey, the post-pandemic recovery and occasional bouts of geopolitical effervescence.
Eminent issues on the back boiler: Potential US sanctions against Ankara. Government pressure on the CBRT vs. bank’s credibility. Bouts of geopolitical concerns. Much-needed structural reforms. High inflation.
USD/TRY key levels
At the moment the pair is retreating 0.13% at 6.9561 and a drop below 6.8923 (2021 low Feb.16) would expose 6.8796 (monthly low Aug.4 2020) and then 6.6834 (monthly low Jun.3 2020). On the other hand, the next hurdle is located at 7.1379 (21-day SMA) followed by 7.3632 (200-day SMA) and finally 7.5415 (2021 high Jan.18).
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
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.