USD/TRY extends the consolidation around 14.80

• USD/TRY remains side-lined in the 14.80 region.
• The solid note in the greenback pushes spot higher.
• The lira remains focused on the geopolitical scenario.

The Turkish lira gives away part of the recent gains and motivates USD/TRY to resume the upside to the 14.80/85 band at the beginning of the week.

USD/TRY looks to Ukraine

USD/TRY regains upside bias and trades with decent gains near 14.85 following two consecutive daily pullbacks.

The move higher in spot tracks the intense upside in the greenback and the poor performance of the risk-associated universe, while attention remains on the Russia-Ukraine talks despite lacklustre hopes of a diplomatic solution of the conflict for the time being.

In the Turkish cash market, yields of the 10y note recede to the 26.70% region following last week’s tops past the 28% yardstick.

What to look for around TRY

The lira keeps the range bound theme unchanged vs. the greenback, always in the area below the 15.00 neighbourhood for the time being. So far, price action in the Turkish currency is expected to gyrate around the performance of energy prices, the broad risk appetite trends, the Fed’s rate path and the developments from the war in Ukraine. Extra risks facing TRY also come from the domestic backyard, as inflation gives no signs of abating, real interest rates remain negative and the political pressure to keep the CBRT biased towards low interest rates remain omnipresent.

Key events in Turkey this week: Economic Confidence Index (Wednesday) – Trade Balance (Thursday) – Manufacturing PMI (Friday).

Eminent issues on the back boiler: FX intervention by the CBRT. Progress (or lack of it) of the government’s new scheme oriented to support the lira via protected time deposits. Constant government pressure on the CBRT vs. bank’s credibility/independence. Bouts of geopolitical concerns. Structural reforms. Earlier Presidential/Parliamentary elections?

USD/TRY key levels

So far, the pair is gaining 0.41% at 14.8317 and a drop below 14.5217 (weekly low March 15) would expose 13.9161 (55-day SMA) and finally 13.7063 (low February 28). On the other hand, the next up barrier lines up at 14.9889 (2022 high March 11) seconded by 18.2582 (all-time high December 20) and then 19.00 (round level).