USD / TRY record high, volatility rises on policy easing risks
USD / TRY, CBRT price analysis and news
- USD / TRY hits new record
- Lower-than-expected inflation leaves room for possible easing
Interest in the Turkish lira is once again attracting attention, although it’s not that hard to grab attention amid the far from exciting G10 FX right now. Let’s go back to the pound, which hit a new all-time low after Turkish President Erdogan said he spoke to the central bank governor, saying interest rates should be cut. The president also set a July / August schedule for interest rates to start falling.
That said, as the governor of Turkey’s central bank quickly said investor concerns about premature policy easing should be ignored. Today’s weaker-than-expected inflation figures will likely fuel concerns of policy easing, with the central bank having more leeway to lower interest rates. Keep in mind that the governor previously said the policy rate would stay above the rate of inflation.
Turkish interest rates vs inflation rate
Looking at the chart, the path of least resistance is higher USD / TRY with volatility likely to accelerate as the July and August meetings approach. Naturally above the swing high of 8.7775 the focus will be on the psychological grip of 9000.
USD / TRY Chart: Daily Period
By the way, the volatility of the Turkish Lira is important for equity traders, namely those who are exposed to Spanish banks and IBEX 35, which we have previously highlighted.