USD/TRY seems to be slightly higher in a tight range near 14.80

  • USD/TRY is rising slightly around the 14.80 region.
  • Turkey’s 10-year yields climb to record highs above 25.00%.
  • The feeling of risk recovers lost ground.

The Turkish lira remains on the defensive albeit slightly and lifts USD/TRY to the 14.85 region on Tuesday.

USD/TRY remains capped at 15.00

USD/TRY advance for the fourth straight session so far on Tuesday despite sentiment appearing to favor the risk complex.

The Turkish lira, meanwhile, remains unable to benefit from the better mood of the riskier assets, apparently on the back of hopes for a positive outcome in the ongoing talks between Russia and Ukraine.

The selling pressure on the lira comes amid another record high in yields on Turkey’s 10-year benchmark notes, this time topping the 25.0% level.

What to look for around TRY

The lira is calming down a bit and trading closer to the area of ​​year-to-date lows against the US dollar. In the very near term, the price action for the Turkish currency should revolve around the performance of energy prices, general trends in risk appetite, the path of Fed rates and developments in the markets. Russian-Ukrainian peace talks. The additional risks TRY faces also come from the domestic backyard, as inflation shows no signs of abating, real interest rates remain negative, and political pressure to keep the CBRT geared towards higher rates. Low interest remains pervasive.

Significant problems on the rear boiler: Progress (or lack thereof) of the new government program to support the lira via protected term deposits. Constant pressure from the government on the CBRT in relation to the credibility/independence of the bank. Geopolitical crises. Structural reforms. Early presidential/parliamentary elections?

USD/TRY key levels

So far the pair is gaining 0.15% to 14.8430 and a drop below 14.5217 (March 15th weekly low) would expose 13.7063 (February 28th low) and finally 13.5091 (February 28th low). of February 18). On the other hand, the next barrier is aligned at 14.9889 (high from March 11, 2022) supported by 18.2582 (all-time high from December 20) then 19.00 (round level).

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