United States of America won’t make any concessions to Turkey in order for the latter to release US citizen. Trump said that he wasn’t concerned that higher steel and aluminium tariffs imposed on Turkey would have a negative effect on Europe. USD/TRY remained relatively unimpressed on Monday, but further developments could give rise to volatility.
USD/TRY continued to trade in a sideways manner yesterday between the 5.9500 support line and the 6.2800 resistance level. If the pair comes under selling interest we could see it breaking the 5.9500 support line, while should it find fresh buying orders along its path we could see I breaking the 6.2800 resistance level.
US Treasury Secretary said that the USA could impose more sanctions to Turkey, if they not make Brunson to be free.
On the other side, Qatar offered support for about 15 Billion USD for the Turkish economy. Germany stated that it wants to avoid an economic melt-down of Turkey, while France seems to be willing to improve trade relationships. If more negative headlines comes, we could see the TRY weakening once again.
USD/TRY dropped breaking the 5.9500 support line and stabilized below it. We could see the pair continuing to trade in a sideways manner. We could see it breaking the 5.9500 resistance line and aim for the 6.2800 resistance hurdle. On the other side, we could see the pair breaking the 5.6700 support line and aim for the 5.4300 support barrier.
The Central Bank of Turkey will announce at 11:00 (GMT) it’s interest rate decision today and is expected to hike rates by 100-125 basis points reaching 18%+ from current 17.75%. 15 out of 16 economists in a poll contacted by Reuters, supported the scenario of a rate hike as currently inflation runs at a rate of 15% while the bank’s target is 5% and respective expectations are of 12-13%. The scenario of a rate hike was also strengthened by a statement of the Turkish finance minister that they would not fight the market. Analysts see the case for the Lira to strengthen in case of a rate hike, while to weaken should the bank remain on hold, implying a possible meddling of the government with monetary policy.
USD/TRY dropped breaking the 4.7650 support line reflecting the slight strengthening of the Turkish Lira yesterday. We could see the pair dropping even further today should the CBT hike rates substantially. If the bears continue to reign over the market, we could see the pair breaking the 4.6810 support line and aim for the 4.6000 support barrier. Should the bulls take over, we could see the pair breaking the 4.7650 resistance line and aim if not break the 4.8340 resistance barrier, trying to approach the 4.9000 resistance area.