CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

USD/TRY hits record high as uptrend persists​​​​​

Turkish lira looks set for further weakness as we head towards the latest central bank meeting.

Lira suffers as the central bank continues to favour growth over a strong currency

The Turkish lira has been one of the biggest under-performers in the FX realm this year, with attempts to stabilise the economy after a major coronavirus-led contraction sparked record lows against the dollar.

This week will see the Turkish central bank return to the fold, with the latest monetary policy announcement coming on Thursday.

However, while the lira continues to plummet, we are unlikely to see the bank step in to arrest that decline. After all, a weaker lira is positive for the international competitiveness of domestic firms.

With real rates in Turkey well into negative territory, the question is whether we will see action taken in response to the double digit inflation rate that has persisted despite expectations of weaker prices. While the headline rate may not raised, there are calls for the one-week repo rate or late-liquidity window to be hiked.

Nevertheless, the lira remains stuck in a rut, with USD/TRY providing a consistent uptrend. With that in mind, long positions are favoured unless price declines below the ₺7.5388 swing low.

Given that this would also necessitate a trendline break, it is unlikely we will see such a move take shape. Instead, the uptrend looks likely to continue as we head into the latest monetary policy decision.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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