The relentless Turkish lira plunge moderated this week as state-owned banks restarted their support in the forex market. The Turkish
The relentless Turkish lira plunge moderated this week as state-owned banks restarted their support in the forex market. The Turkish lira to USD (TRY/USD) exchange rate was hovering at 0.038 while the lira to pound (TRY/GBP) was trading at 0.030. In all, the currency has plunged by more than 39% in the past 12 months.
Turkey inflation data ahead
Copy link to section
The Turkish lira has been in a strong downward trend in the past few months even as some parts of the economy did well. For example, the tourism sector is booming, with the weak lira helping foreigners find bargains.
Data published on Monday showed that the manufacturing PMI rose to 51 in June. A PMI reading of 50 and above is a sign that the sector was still expanding. Additional data showed that Turkish retail sales jumped by 0.9% in April.
The most recent Turkish lira news was that banks have started intervening in the forex market. According to Bloomberg, banks sold as much as $1 billion by midday to prop up the currency.
Looking ahead, the next important catalyst for the Turkish lira will be the upcoming inflation data scheduled for Thursday. Economists believe that the headline consumer price index (CPI) dropped slightly from 39.47% in June. It peaked at about 90% in 2022. On a MoM basis, analysts expect that inflation rose to 4.84%.
The inflation data will come a few days after the Turkish central bank delivered its interest rate decision. It decided to hike rates to 15% in June as it restarted its battle against inflation. As I wrote here, economists expected the bank to hike by over 20%.
The challenge for the lira is that many people in Turkey and international investors have lost interest in the currency. As such, the currency will likely continue falling as long as Erdogan is president. Besides, it has already plunged by more than 80% in the past five years.
Turkish lira to USD forecast
Copy link to section
TRY/USD chart by TradingView
The daily chart shows that the TRY/USD has been in a strong bearish trend in the past few months. It has plunged below all moving averages while the Relative Strength Index (RSI) has moved below the oversold level.
Therefore, the Turkish lira to USD and GBP will likely continue falling as sellers target the next key level at 0.035 and 0.025, respectively.
Ad
Looking to capitalise on rising & falling USD, GBP, EUR rates? Trade forex in minutes with our top-rated broker, eToro.
10/10
77% of retail CFD accounts lose money.
invezz.com