USD/TRY Price News: Turkish Lira awaits CBRT’s bold Interest Rate Decision near 23.50

• USD/TRY repeats two-week-old inaction surrounding the all-time high, renews intraday low of late.
• Turkish government lifted minimum wage by 34% earlier in the week to back odds of a bumper rate hike.
• Fed Chair Powell’s failure to please markets with hawkish statements prod US Dollar bulls.
• Turkish Lira could rally on CBRT’s heavy rate hike, expected 20.0% versus 8.5% prior.

USD/TRY takes offers to refresh the intraday low near 23.53 heading into Thursday’s European session. In doing so, the Turkish Lira (TRY) pair aptly portrays the market’s cautious mood ahead of the Central Bank of the Republic of Türkiye (CBRT) Interest Rate Decision.

Apart from the pre-CBRT anxiety, the holiday in China and caution before multiple central bank announcements from the UK, Switzerland, Mexico and Indonesia also keeps the USD/TRY traders on their toes.

It’s worth noting that a change of the CBRT leader and Turkish Finance Minister earlier in the month raised hawkish concerns about the Turkish central bank’s bold move, likely to the tune of around 1150 basis points (bps) to 20.0%. Additionally, Turkish President Recep Tayyip Erdogan’s readiness to relinquish control over the rates to tame higher inflation rates also bolsters hopes of witnessing an interesting day ahead.

Additionally, Tuesday’s announcement of a 34% hike in the minimum wage in Turkiye adds strength to the hopes of witnessing a bumper rate increase and a rally in the Turkish Lira (TRY).

On the other hand, US Dollar Index (DXY) licks its wounds at the monthly low surrounding 102.00 despite Fed Chair Jerome Powell’s failure to convince markets of its hawkish bias. That said, Fed’s Powell stuck to hawkish bias in bi-annual testimony to the US House Financial Services Committee despite marking the absence of any fresh comments, as well as contrasting statements from other Fed Officials. The same weighed on the US Dollar the previous day. That said, Federal Reserve Bank of Chicago President Austan Goolsbee prod US Treasury yields and underpin the US Dollar weakness as he said that the decision last week was a close call for him. The central bank has to “do more sniffing” before another rate hike, Fed’s Goolsbee added.

Looking ahead, CBRT’s ability to please the TRY bulls will be at the test as the market is too hawkish and a slightly lesser-than-expected rate hike might also tease the bears to refresh the USD/TRY top, after an initial pullback.

Technical analysis

USD/TRY pair portrays the lower high formation on the daily chart ever since it marked a Doji candlestick while refreshing the record top on June 13. The same joins the overbought RSI conditions and recently downbeat MACD signals to lure the Turkish Lira buyers to regain the 20.00 round figure.