USD/TRY recedes from YTD highs around 14.60, focus on Russia-Ukraine

• USD/TRY clocked new YTD peaks around 14.60.
• The lira comes under pressure on geopolitical concerns.
• Yields of the Turkey 10y bond rose to multi-week highs past 23%.

Sellers remain in control of the sentiment surrounding the Turkish lira and pushed USD/TRY to fresh cycle peaks around 14.60 earlier in the session.

USD/TRY: An imported currency crisis in the offing?

USD/TRY extended the uptrend for the fifth consecutive session on Thursday, as the selling pressure around the lira intensified after Russia attacked Ukraine early on Thursday.

The worsening geopolitical scenario pushes crude oil prices and gold to fresh cycle highs, while the greenback navigates at shouting distance from 2022 peaks when tracked by the US Dollar Index, all key factors weighing on the Turkish currency.

In addition, yields of the Turkey 10y benchmark bond climb to levels last seen in early January above the 23.0% level, in stark contrast with the performance of the bonds markets overseas.

USD/TRY key levels

So far, the pair is advancing 2.73% at 14.1860 and a drop below 13.4317 (weekly low Feb.11) would expose 13.2327 (monthly low Feb.1) and finally 12.7523 (2022 low Jan.3). On the other hand, the next up barrier lines up at 14.6052 (2022 high Feb.24) seconded by 18.2582 (all-time high Dec.20).