Market news
20.01.2022, 02:27

USD/TRY: Bulls and bears jostle around $13.45 ahead of CBRT Interest Rate Decision

  • USD/TRY struggles to overcome the second consecutive weekly losses.
  • Turkish President Erdogan urges to convert foreign currency savings to lira, sees FX- demand driven volatility.
  • CBRT is expected to keep benchmark rates unchanged at 14.0% but hints of further rate cuts will be crucial to search.
  • US Treasury yields regain upside momentum following a pullback from multi-day top.

USD/TRY seesaws around $13.45 as traders await the key Turkish Central Bank (CBRT) verdict during early Thursday.

The quote dropped the previous day on broad US dollar pullback and comments from Turkish President Recep Tayyip Erdogan. It’s worth noting that the 500 basis points (bps) of rate cuts and huge policy moves battle the strong inflation to test USD/TRY traders ahead of the CBRT Interest Rate Decision.

The US Dollar Index (DXY) reversed from weekly top to snap three-day uptrend the previous day after the Treasury yields dropped after refreshing multi-day high. That said, the US 10-year Treasury yields added 2.2 bps to 1.849% at the latest while nearing the highest levels in two years.

The recent rebound in the US Treasury yields could be linked to the speech from US President Joe Biden who praised Fed Chair Jerome Powell, indirectly signaling favor for hawkish Fed actions. Also fueling the bond coupons were challenges to risk appetite marked in Biden’s speech as he touched various risk-sensitive issues ranging from Russia to China, not to forget the Build Back Better (BBB) stimulus.

Read: US President Biden: Inflation has everything to do with supply chain

It’s worth noting that Turkish President Erdogan spoke at a cabinet meeting on Wednesday while urging citizens and companies to convert their foreign currency savings into the Turkish lira, as Ankara seeks to boost demand for the local currency, per Reuters. The national leader earlier said, “there will no longer be volatility in financial markets caused by unbalanced demand for foreign currency, after the lira currency tumbled 44% in value against the dollar last year.”

Looking forward, CBRT moves will be crucial for the USD/TRY traders as the nation still struggles with record inflation data and Erdogan’s push for more rate cuts.

With this in mind, FXStreet’s Valeria Bednarik says,

The December statement suggests that policymakers will pause the easing cycle and monitor its effects in the coming three months.

Read: CBRT Preview: USD/TRY poised to run at the slightest sign

Technical analysis

While 10-DMA restricts the USD/TRY short-term upside to around $13.56, a descending resistance line from December 21, close to $13.85 by the press time, will be crucial for the pair buyers to watch.

Alternatively, 21-DMA near $13.05 restricts the short-term downside of the pair ahead of the $13.00 threshold.

Overall, USD/TRY fades the recovery moves from late December but a clear break of $13.85 will be a strong bullish cal.

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location