USD/TRY snaps two-day downtrend around 17.90 ahead of Turkish Current Account Balance

• USD/TRY pares recent losses ahead of the key Turkish data.
• Fed policymakers resist praising downbeat US inflation.
• Turkiye reported downbeat Unemployment Rate for June previously.
• Turkish President Erdogan is also up for a speech, Ankara braces for record Current Account Deficit.

USD/TRY takes the bids to refresh intraday high around 17.92 amid the initial European session on Thursday. In doing so, the Turkish lira (TRY) pair prints the first daily gains in three ahead of the nation’s publication of the Current Account Balance data for June.

Turkey's current account is expected to record a deficit of $3.4 billion in June and end the year with a deficit of more than $40 billion, a Reuters poll showed on Friday, as soaring energy prices widen the shortfall.

In addition to the pre-data move, the US dollar’s rebound amid the Fed policymakers’ mixed comments and headlines surrounding China also underpin the USD/TRY pair’s latest rebound.

Mary Daly, President of the San Francisco Fed recently hesitated to declare victory over inflation. In doing so, the policymaker joined the likes of Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans while rejecting any major reason to cheer July’s US Consumer Price Index (CPI) that dropped to 8.5% on YoY versus 8.7% expected and 9.1% prior.

Previously, Fed’s Kashkari mentioned that he hasn't "seen anything that changes" the need to raise the Fed's policy rate to 3.9% by year-end and 4.4% by the end of 2023. Further, Fed policymaker Evens stated, “The economy is almost surely a little more fragile, but would take something adverse to trigger a recession.” Fed’s Evans also called inflation "unacceptably" high.

Elsewhere, talks surrounding China also propel the USD/TRY prices. Reuters relied on sources to mention that the saying US President Biden rethinks steps on China tariffs in wake of Taiwan response. Additionally, a jump in the coronavirus cases from China, to 700 new confirmed cases in the mainland on August 10 versus 444 a day earlier, favors the pair buyers. Furthermore, China Customs’ latest rejection of US meat from a specific producer and comments from the Taiwan Foreign Ministry, suggest rejection of China’s motto of 'One country, Two systems’ also underpin the US dollar’s safe-haven demand.

It should be noted that the Turkish Unemployment Rate for June dropped to 10.3% on Wednesday, below the downwardly revised 10.6% prior.

Moving on, comments from Turkish President Recep Tayyip Erdogan, at two different events around 11:30 GMT and 12:30 GMT, will be important. It should be noted that the US Jobless Claims and the monthly Producer Price Index (PPI) for July could also entertain short-term USD/TRY traders.

Technical analysis

USD/TRY remains on the bull’s radar until staying beyond the upward sloping support line from early May, near 17.75 by the press time. However, RSI suggests that the bulls are running out of steam around the 18.00 threshold, making it an important hurdle.