fxs_header_sponsor_anchor

News

USD/TRY: Turkish Pres. Erdogan propels biggest rally in 31 months

  • USD/TRY fades pullback from November 2020 top, keeps longest rally since August 2018.
  • Turkey’s President Recep Tayyip Erdogan sacked the Central Bank of the Republic of Turkey (CBRT)Governor Naci Abgal late on Friday.
  • Risk-off mood adds strength to the upside momentum, US session reaction, Fedspeak eyed.

USD/TRY consolidates the heaviest jump since November 2018 while easing to 8.10 during early Monday. Even so, the pair keeps Turkish President Recep Tayyip Erdoğan-led rally while flashing over 12% intraday gains by the press time.

During late-Friday, Erdoğan fired CBRT Governor Abgal after CBRT announced a higher than expected rate hike of 200 basis points (bps), to 19% interest rate, during a routine monetary policy announcement. Mr. Erdogan has been strict in ousting policymakers and had take decisions in the past.

Following the latest decision, Reuters said, “The appointment of Sahap Kavcioglu, a former banker and ruling party lawmaker, in the early hours on Saturday marked the third time since mid-2019 that Erdogan has abruptly fired a central bank chief.”

Although Kavcioglu is considered sharing the likes of Erdogan, the job of CBRT Governor is through one and hence challenges over the USD/TRY looms despite the latest pullback.

Other than the domestic catalysts, risk-off mood, mainly taking clues from the coronavirus (COVID-19) resurgence and reflation fears, favor the US dollar strength and suggest further strength of the USD/TRY prices.

Moving on, American traders’ reaction to the move will be closely watched while many Fed policymakers are lining for speeches and could add volatility into the USD/TRY pair.

Technical analysis

Although November top surrounding 8.5815 guards USD/TRY pair’s immediate upside, a downward sloping trend line from November 24, 2020, near 7.9390, restricts the bears’ entry.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.