USD/TRY: Options market keeps bearish bias for the second week

Anil Panchal FXStreet

One-month risk reversal (RR) of USD/TRY, a gauge of calls to puts, braces for a second weekly decline, -0.8000 on a week by the press time of early Friday, per Reuters data.

Talking about the daily RR, the figures turn positive for the first time in the last four days, +0.075 being the latest one.

It’s worth noting that the Central Bank of the Republic of Turkey (CBRT) rate cuts again proved to be ineffective in stopping the USD/TRY bulls as the Turkish lira (TRY) pair refreshed all-time high with a $15.74 level the previous day, down 0.26% intraday around $15.65 at the latest.

Read: Turkey: CBRT cuts policy rate by 100 basis points to 14% as expected

That said, the CBRT Governor Şahap Kavcıoğlu has already signaled a pause to the rate cuts in 2022 and hence the latest hints of a pullback in the USD/TRY prices from the options market should be taken seriously.

On Thursday, Turkish President Recep Tayyip Erdogan announced a hike in the minimum wage by 50% and promised unspecified measures to maintain the US dollar value of wages, as per The Guardian.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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