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USD/TRY picks up pace 

On Friday, USD/TRY extended its monthly rebound for the seventh consecutive session, as the dollar’s rally continues unabated and geopolitical concerns keep the lira on the back foot so far. 

USD/TRY rises due to USD strength and geopolitics USD/TRY rises to new 2022 highs around 15.50. 

The Turkish lira continues to fall, pushing the USD/TRY to new 2022 highs in the 15.50 range on Friday. 

President Erdogan reacted angrily to news that Sweden and Finland will apply for NATO membership amid rising tensions between the West and Russia over the Ukraine conflict.

Retail Sales in Turkey increased 0.3 percent month on month and 2.5 percent year on year in March, according to data. Furthermore, Industrial Production increased at an annualised rate of 9.6 percent, exceeding initial estimates. 

USD/TRY remains on the rise for another session, having already passed through the 15.00 mark. So far, the Turkish currency is expected to fluctuate in response to the performance of energy prices, broad risk appetite trends, the Fed’s rate path, and developments in the Ukraine war.

Extra risks to the TRY come from within, as inflation shows no signs of abating, real interest rates remain entrenched in negative territory, and political pressure to keep the CBRT biassed towards low interest rates is omnipresent. 

The progress (or lack thereof) of the government’s new scheme to support the lira through protected time deposits. Constant government pressure on the CBRT vs. credibility/independence of the bank Geopolitical concerns come and go. Reforms to the structure. Presidential/Parliamentary elections are coming up.

USD/TRY pivot points 

So far, the pair is up 0.63 percent at 15.4618, with the next resistance level at 15.4832 (2022 high May 13), followed by 18.2582 (all-time high December 20), and finally 19.00. (round level). A drop below 14.6836 (monthly low May 4) would expose 14.5458 (monthly low April 12) and then 14.5136. (weekly low March 29).

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