On Tuesday, the Turkish Lira resumed the downside versus the US Dollar against the backdrop of the rebound in the greenback, but extended the consolidation mood at the same time. The Turkish Lira now focuses on key inflation figures reported in Turkey (Wednesday), amid speculation that the figures are projected to continue to rise.

The US Dollar Index extended its gains against a basket of major currencies on Tuesday, after the greenback showed signs of a rebound against a number of rival majors. Despite a drop in key support levels, the USD maintains some momentum going into the FOMC event on Wednesday, even as US yields have pushed lower.

The decline in Turkish lira in the New York session is due to a rebound in US dollar exchange rates after [Monday’s] rebound from its Friday lows,” said Atilla Yesilada, senior strategist at Global Source Partners. Prior to the release of inflation data on Wednesday, TRY may remain under selling pressure versus USD amidst concern over political tensions between the US, Germany and Turkey.