USD/TRY wakes up and climbs to fresh 2022 highs beyond 15.00

Finally, some action around the pair. The Turkish lira remains on the back foot and motivates USD/TRY to clinch fresh 2022 highs past the 15.00 mark, on Tuesday.

USD/TRY in 5-month highs

USD/TRY posts gains for the fourth consecutive session, this time surpassing the key barrier at the 15.00 yardstick for the first time since mid-December 2021.

The lira loses further ground despite the broad-based improvement in the risk complex and the offered stance in the US dollar, while Turkey 10y bond yields rose to multi-week highs north of the 23.00% mark.

In what was the sole release in the domestic calendar, Turkey’s jobless rate edged higher to 11.5% in March.

Later in the session, and absent relevant releases on the US docket, the dollar is expected to take centre stage in light of speeches by FOMC’s Williams, Bostic, Waller, Kashkari and Mester.

What to look for around TRY

The lira broke below the multi-week range bound theme vs. the greenback and lifted USD/TRY to the area beyond the 15.00 neighbourhood. So far, price action in the Turkish currency is expected to gyrate around the performance of energy prices, the broad risk appetite trends, the Fed’s rate path and the developments from the war in Ukraine. Extra risks facing TRY also come from the domestic backyard, as inflation gives no signs of abating, real interest rates remain entrenched in negative figures and the political pressure to keep the CBRT biased towards low interest rates remain omnipresent.

Key events in Turkey this week: Unemployment Rate (Tuesday).

Eminent issues on the back boiler: FX intervention by the CBRT. Progress (or lack of it) of the government’s new scheme oriented to support the lira via protected time deposits. Constant government pressure on the CBRT vs. bank’s credibility/independence. Bouts of geopolitical concerns. Structural reforms. Upcoming Presidential/Parliamentary elections.

USD/TRY key levels

So far, the pair is gaining 1.14% at 15.2430 and faces the next hurdle at 15.2445 (2022 high of May 10) seconded by 18.2582 (all-time high of December 20) and then 19.00 (round level). On the other hand, a drop below 14.6836 (monthly low of May 4) would expose 14.5458 (monthly low of April 12) and finally 14.5136 (weekly low of March 29).