USD/TRY's dramatic intervened drop is stablising around 11.0000
Updated
The USD/TRY pair extended its dramatic turnaround from a record high touched earlier this week and continued losing ground through the mid-European session on Thursday. This marked the fourth successive day of a negative move and dragged spot prices to a six-week low, around the 10.20 region in the last hour. The pair, however, found some support at lower levels and quickly bounced back above the 11.00 round-figure mark.
The Turkish lira's recent strong gains came after the government announced extraordinary measures on Monday, which include the introduction of a new program to protect savings from currency fluctuations. Adding to this, President Recep Tayyip Erdogan said the government and the Central Bank of the Republic of Turkey (CBRT) would guarantee certain local currency deposits against losses from FX depreciation.
Erdoğan also reassured that citizens would not have to convert lira savings into foreign exchange due to volatility and emphasized that Turkey is committed to the free market economy. The President further underlined that Turkey is adamant about its new economic model and stuck to his unconventional policy to use lower interest rates to combat inflation.
Nevertheless, the lira remains on track to record its best weekly gains ever, of around 40% and seemed rather unaffected by a modest pickup in US dollar demand. That said, extremely overstretched conditions prompted some short-covering amid relatively thin liquidity ahead of the year-end holiday season.
- USD/TRY remained under intense selling pressure for the fourth successive day on Thursday.
- The recent measures announced by the Turkish government continued lending support to the lira.
- Extremely overstretched conditions prompted intraday short-covering move amid thin liquidity.
>Dollar Edges Lower as Confidence Over Omicron Supports High Yielders
The dollar traded marginally lower early in the European session Thursday, near a one-week low, amid growing optimism for the global economic outlook despite the surge of Omicron-variant Covid cases.
At 2:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 96.043, having earlier fallen to 96.018 for the first time since Dec. 17.
USD/JPY rose 0.1% to 114.19, with the yen, another safe haven, slipping despite Japan upgrading earlier Thursday its growth projections for the next fiscal year starting in April.
The growth projection was raised to 3.2% for fiscal 2022 from a forecast 2.2% real GDP growth seen at a mid-year review in July. This would be the fastest growth since fiscal 2010.
EUR/USD rose 0.1% to 1.1338, adding to its overnight advance, GBP/USD climbed 0.1% to 1.3354, while the risk-sensitive AUD/USD rose 0.1% to 0.7218, after Wednesday’s surge of almost 1%.
Risk sentiment has improved as the week has progressed, helped by a couple of studies suggesting that patients with the Omicron variant face a lower risk of hospitalization and severe disease compared with the Delta variant, the previously dominant strain.
Also helping was the release of positive U.S. economic data on Wednesday, with GDP growing 2.3% quarter-on-quarter in the third quarter and existing home sales rising 1.9% in November. However, it was U.S. consumer confidence improving more than expected in December despite the resurgence in Covid-19 infections which had the biggest impact.
“Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased,” said a Conference Board spokeswoman.
The economic data slate is packed Thursday, including initial jobless claims, new home sales, durable goods orders, and the PCE price index. It also includes personal income and spending, as well as the University of Michigan consumer sentiment and expectations indexes.
Elsewhere, USD/TRY dropped 1.8% to 11.8270, with the lira continuing to rebound after President Recep Tayyip Erdogan said Wednesday that measures to protect the Turkish lira bank deposits from depreciation amid a currency crisis have achieved their goal.
That said, the currency is still about 40% down so far this year after a series of interest rate cuts, engineered by the president, despite inflation soaring over 20%.
Elsewhere, the Russian ruble rose to its highest level in over a month ahead of President Vladimir Putin's annual press conference, against a backdrop of continued tension on the Ukrainian border, where over 100,000 Russian troops have massed. Analysts will want to see whether Putin repeats to a more general audience the hawkish comments that he made to his defense chiefs earlier in the week.
>USD/TRY's dramatic intervened drop is stablising around 12.0000
USD/TRY is stabilising following three consecutive days of falling prices that have wiped out the November rally. At the time of writing, USD/TRY is trading at 12.0354 and in between an 11.9655 and 12.0828 range so far.
President Recep Tayyip Erdoğan ordered the Turkish central bank to start reducing interest rates earlier in the year which led to the currency falling around 50% since September. Inflation rose 21.31% in November compared to the same period last year. On a monthly basis inflation rose 3.51% compared to October. The president insisted on four interest rate cuts over the four months despite surging inflation and the market responded in kind.
However, on Monday 20 December the TRY weakened significantly when President Erdoğan said in a televised speech that he will continue cutting interest rates after rates were cut by 100 basis points. This took the rate to -6%, the lowest in the world and the TRY to the weakest level since the 1980s. However, there was a dramatic comeback in the currency when the government announced a series of measures to support the currency on Monday.
Amongst other measures, including direct FX forward contracts from the central bank for companies heading overseas business, Erdoğan explained that the government will protect lira deposits by making up for the losses incurred. TRY has rallied, and the plan is working, so far. However, if the president is intent on cutting rates in an inflationary environment, then the lira will be left vulnerable to further weakness.
Technicals are futile under such fundamental drivers and wild price action as this, but nevertheless, if there is to be stability, then the range are between 11.0000 - 14.0000 .
- BUYING PRESSURE PRICE 10.2000 - 11.3000
- Our option for #USDTRY is TO WAIT FOR BUYERS DECISION PRICE ACTION WITH A CONFIRMATION.
- Economy BUBBLE has happened or is close to !!
- The outlook and the overall trend for the pair is BULLISH.
Prev. Close 12.0373
Bid 11.3001
Day's Range 10.2329 - 12.3582
Open 16.4798
Ask 11.494752
wk Range 6.8882 - 18.36741
Year Change 57.36%
It’s important to keep in mind that cryptocurrency markets are extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours or a few days and even harder to give long-term estimates. As such, analysts and online forecasting sites can get their predictions wrong. We recommend that you always do your own research and consider the latest market trends, news, technical and fundamental analysis , and expert opinion before making any investment decisions. Be patient and look long term wisely and never invest more than you can afford to lose.
Trading & Investing both are the master of RISK.
Please comment, like and follow if it was helpful for you.
Thank you for your time.
Have a profitable day.
| Review and analysis by Samadi.Finance |
The Turkish lira's recent strong gains came after the government announced extraordinary measures on Monday, which include the introduction of a new program to protect savings from currency fluctuations. Adding to this, President Recep Tayyip Erdogan said the government and the Central Bank of the Republic of Turkey (CBRT) would guarantee certain local currency deposits against losses from FX depreciation.
Erdoğan also reassured that citizens would not have to convert lira savings into foreign exchange due to volatility and emphasized that Turkey is committed to the free market economy. The President further underlined that Turkey is adamant about its new economic model and stuck to his unconventional policy to use lower interest rates to combat inflation.
Nevertheless, the lira remains on track to record its best weekly gains ever, of around 40% and seemed rather unaffected by a modest pickup in US dollar demand. That said, extremely overstretched conditions prompted some short-covering amid relatively thin liquidity ahead of the year-end holiday season.
- USD/TRY remained under intense selling pressure for the fourth successive day on Thursday.
- The recent measures announced by the Turkish government continued lending support to the lira.
- Extremely overstretched conditions prompted intraday short-covering move amid thin liquidity.
>Dollar Edges Lower as Confidence Over Omicron Supports High Yielders
The dollar traded marginally lower early in the European session Thursday, near a one-week low, amid growing optimism for the global economic outlook despite the surge of Omicron-variant Covid cases.
At 2:50 AM ET (0750 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 96.043, having earlier fallen to 96.018 for the first time since Dec. 17.
USD/JPY rose 0.1% to 114.19, with the yen, another safe haven, slipping despite Japan upgrading earlier Thursday its growth projections for the next fiscal year starting in April.
The growth projection was raised to 3.2% for fiscal 2022 from a forecast 2.2% real GDP growth seen at a mid-year review in July. This would be the fastest growth since fiscal 2010.
EUR/USD rose 0.1% to 1.1338, adding to its overnight advance, GBP/USD climbed 0.1% to 1.3354, while the risk-sensitive AUD/USD rose 0.1% to 0.7218, after Wednesday’s surge of almost 1%.
Risk sentiment has improved as the week has progressed, helped by a couple of studies suggesting that patients with the Omicron variant face a lower risk of hospitalization and severe disease compared with the Delta variant, the previously dominant strain.
Also helping was the release of positive U.S. economic data on Wednesday, with GDP growing 2.3% quarter-on-quarter in the third quarter and existing home sales rising 1.9% in November. However, it was U.S. consumer confidence improving more than expected in December despite the resurgence in Covid-19 infections which had the biggest impact.
“Expectations about short-term growth prospects improved, setting the stage for continued growth in early 2022. The proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months all increased,” said a Conference Board spokeswoman.
The economic data slate is packed Thursday, including initial jobless claims, new home sales, durable goods orders, and the PCE price index. It also includes personal income and spending, as well as the University of Michigan consumer sentiment and expectations indexes.
Elsewhere, USD/TRY dropped 1.8% to 11.8270, with the lira continuing to rebound after President Recep Tayyip Erdogan said Wednesday that measures to protect the Turkish lira bank deposits from depreciation amid a currency crisis have achieved their goal.
That said, the currency is still about 40% down so far this year after a series of interest rate cuts, engineered by the president, despite inflation soaring over 20%.
Elsewhere, the Russian ruble rose to its highest level in over a month ahead of President Vladimir Putin's annual press conference, against a backdrop of continued tension on the Ukrainian border, where over 100,000 Russian troops have massed. Analysts will want to see whether Putin repeats to a more general audience the hawkish comments that he made to his defense chiefs earlier in the week.
>USD/TRY's dramatic intervened drop is stablising around 12.0000
USD/TRY is stabilising following three consecutive days of falling prices that have wiped out the November rally. At the time of writing, USD/TRY is trading at 12.0354 and in between an 11.9655 and 12.0828 range so far.
President Recep Tayyip Erdoğan ordered the Turkish central bank to start reducing interest rates earlier in the year which led to the currency falling around 50% since September. Inflation rose 21.31% in November compared to the same period last year. On a monthly basis inflation rose 3.51% compared to October. The president insisted on four interest rate cuts over the four months despite surging inflation and the market responded in kind.
However, on Monday 20 December the TRY weakened significantly when President Erdoğan said in a televised speech that he will continue cutting interest rates after rates were cut by 100 basis points. This took the rate to -6%, the lowest in the world and the TRY to the weakest level since the 1980s. However, there was a dramatic comeback in the currency when the government announced a series of measures to support the currency on Monday.
Amongst other measures, including direct FX forward contracts from the central bank for companies heading overseas business, Erdoğan explained that the government will protect lira deposits by making up for the losses incurred. TRY has rallied, and the plan is working, so far. However, if the president is intent on cutting rates in an inflationary environment, then the lira will be left vulnerable to further weakness.
Technicals are futile under such fundamental drivers and wild price action as this, but nevertheless, if there is to be stability, then the range are between 11.0000 - 14.0000 .
- BUYING PRESSURE PRICE 10.2000 - 11.3000
- Our option for #USDTRY is TO WAIT FOR BUYERS DECISION PRICE ACTION WITH A CONFIRMATION.
- Economy BUBBLE has happened or is close to !!
- The outlook and the overall trend for the pair is BULLISH.
Prev. Close 12.0373
Bid 11.3001
Day's Range 10.2329 - 12.3582
Open 16.4798
Ask 11.494752
wk Range 6.8882 - 18.36741
Year Change 57.36%
It’s important to keep in mind that cryptocurrency markets are extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours or a few days and even harder to give long-term estimates. As such, analysts and online forecasting sites can get their predictions wrong. We recommend that you always do your own research and consider the latest market trends, news, technical and fundamental analysis , and expert opinion before making any investment decisions. Be patient and look long term wisely and never invest more than you can afford to lose.
Trading & Investing both are the master of RISK.
Please comment, like and follow if it was helpful for you.
Thank you for your time.
Have a profitable day.
| Review and analysis by Samadi.Finance |
Trade active
Prev. Close 11.8041Bid 12.4843
Day's Range 11.7814 - 12.5462
Open 16.4798
Ask 12.506252
wk Range 6.8882 - 18.3674
Trade active
Trade active
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