USD/TRY prints mild gains near $13.50 as Turkish President Erdogan fires Chief Statistician

• USD/TRY pares Friday’s losses during a sluggish session, refreshes intraday high at the latest.
• Erdogan sacks Head of Turkish Statistical Institute as inflation rallied in December.
• Hawkish Fedspeak, geopolitical fears also challenge pair bears.

USD/TRY picks up bids to refresh intraday high around $13.55, up 0.30% on a day during Monday’s Asian session.

In doing so, the Turkish lira (TRY) pair reacts to the weekend news that the national leader Recep Tayyip Erdogan fires another diplomat after witnessing disappointing inflation data.

This time it’s the Head of the Turkish Statistical Institute, which posts official inflation data, Sait Erdal Dincer who got replaced with Erhan Cetinkaya previous Vice President of Turkey's banking regulatory agency. It’s worth noting that the nation’s inflation data for December rose to 36.08% versus 21.31% previous.

On the other hand, hawkish comments from the US Federal Reserve (Fed) officials and the US Senate’s aggression towards passing a law to sanction Russia also play their role to propel USD/TRY prices, by way of the US dollar’s safe-haven appeal.

Federal Reserve Bank of Minneapolis President Neel Kashkari said on Friday that he expects Fed to raise rates at the March meeting. Though, the policymaker emphasized the importance of incoming data while also saying, “Have to see how data plays out.” On the same line was Raphael Bostic, President of the Fed’s Atlanta branch who mentioned, per the Financial Times (FT), “If the data say that things have evolved in a way that a 50 basis point move is required or [would] be appropriate, then I’m going to lean into that . . . If moving in successive meetings makes sense, I’ll be comfortable with that.”

While portraying risk-off mood, the US 10-year Treasury yields add 1.5 basis points (bps) to 1.795% whereas S&P 500 Futures drop 0.30% intraday at the latest.

Looking forward, a light calendar emphasizes the risk catalysts as the key drivers.

Technical analysis

USD/TRY seesaws between the 50-DMA and a descending resistance line from December 21, 2021, respectively around $13.35 and $13.75.