USD/TRY bulls cheer Ukraine fears, CBRT inaction to approach 15.00

• USD/TRY extends the previous day’s recovery moves, renews daily top of late.
• CBRT matched wide market expectations of status-quo, reiterated ‘Liralization’ despite challenges to inflation.
• Turkey brokers a Putin-Zelenskyy meeting but nothing concrete came out yet, Xi-Biden call will be important as well.
• Risk-off mood underpins USD rebound, light calendar limits moves.

USD/TRY rises for the second consecutive day, up 0.42% intraday around 14.75 heading into Friday’s European session.

The Turkish lira (TRY) pair rose for the first time in three days the previous day after the central bank of Turkey (CBRT) left the monetary policy intact, in line with market forecast, even as rising oil prices add to the nation’s inflation woes. It’s worth noting that Ankara’s push for TRY preference saved the nation from record inflation prices but February’s around 50% print and recently rising oil prices renew reflation fears and tease USD/TRY bulls.

Elsewhere, the US dollar’s first daily performance in three also favors the USD/TRY bulls of late. The US Dollar Index (DXY) snaps a three-day downtrend while defending 98.00 level of late.

The greenback gauge’s latest gains could be linked to the market’s risk-off mood amid lack of progress in Ukraine-Russia talks, as well as Western hints that Moscow may use nuclear weapons should the war drags. Additionally challenging the sentiment are concerns over a phone call between US President Joe Biden and his Chinese counterpart Xi Jinping, as well as fears of Russia’s default.

It should be noted, however, that a lack of major data/events limits the pair’s immediate moves while teasing the first negative weekly closing in five.

Technical analysis

An upward sloping trend line from late December joins February’s top to defend USD/TRY bulls around 14.70-65. The recovery moves, however, need a daily closing beyond 15.00 to keep reins.