- Summary:
- USDTRY hit another record high today as the pressure to Turkish Lira continues after the inflation in the country reached 11.77% almost double than Turkey's
USDTRY hit another record high today as the pressure to Turkish Lira continues after the inflation in the country reached 11.77% almost double than Turkey’s Central bank inflation target, while CBRT also revised higher the year-end inflation at 8.9%.
Turkeys economic problems continue as Turkey’s GDP contracted by 9.9% in the second quarter marking the worst contraction in the last ten years for the Turkish economy. The data was slightly better than the analyst’s expectation of a contraction of 11%.
The Turkish lira depreciation might force the CBRT to hike interest rates. President Erdogan is a big supporter of low-interest rates and wants to avoid raising the borrowing costs, which might hurt the economic recovery. The average cost of borrowing to Turkish Banks rose almost to 10%, compared with a low point of 7.3% in mid-July.
The lack of confidence in the Turkish Lira has shifted Turks to dollar currency deposits and gold. Turkey’s trade deficit rose in August amid record gold imports in the country. The trade deficit might even get worse as the travel industry in the country had a disastrous summer amid the coronavirus outbreak.
USDTRY Price Daily Technical Analysis
USDTRY continues higher as the strong uptrend makes consecutive record highs entering the overbought area for one more time. The technical picture continues to point to higher levels, and the pullbacks should b considered as a buying opportunity. Bulls face the record highs at 7.4637, and then at 7.50 round figure.
On the downside, immediate support would be met at 7.4418 the daily low. Next support for USDTRY is at 7.3871 the low from September 3. More bids would emerge at 7.1989 the low from August 21.
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USDTRY Daily Chart
