USD/TRY retreats from fresh record highs near 9.20 amid Erdogan's surprise move

USD/TRY continues to march higher near 9.200, new records highs.
Turkish President sacks three Central Bank’s policymakers in a sudden move.
US Dollar Index holds near 94.00, licking post-CPI wounds.

Rekha Chauhan Independent Analyst

USD/TRY posts gains for the fifth straight session on Thursday. The cross-currency pair peaked at all times at 9.188 following the previous session’s upside momentum. At the time of writing, USD/TRY is trading at 9.151, up 0.70% for the day.

The Turkish lira fell to its lowest level on record against the greenback following President Recep Tayyip Erdogan recent action. Erdogan abruptly removed deputy Central Bank Governors Semih Tumen, Ugur Namik Kucuk, and central bank’s Monetary Policy (MPC) member Abdullah Yavas in the early hours.

The members were replaced by Taha Cakmak as a deputy Central Bank Governor and Yusuf Tuna as an MPC member.

The currency has weakened about 19% so far in 2021 amid concerns about the central bank's credibility. With inflation, more than 19%, the Turkish central bank slashed its key interest rates by 100 basis points to 18% last month, in the face of President Erdogan’s calls for lower rates.

On the other hand, the greenback retreats from its yearly highs above 94.50, as investors discount higher US CPI readings and the FOMC insights on Fed’s tapering timeline.

As for now, traders are bracing for the US Initial Jobless Claims to gain fresh trading impetus.

Author

Rekha Chauhan

Independent Analyst

Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.

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