The USD/TRY forex exchange rate continues to drag on. It was trading at 18.80 on Thursday, where it has been stuck for months. During this period, the Turkish lira has become the most boring currency to watch and even analyze. Unlike other currencies, it has failed to react to numerous important economic events like the CBRT decision and vital data like inflation.
The USD to TRY exchange rate has remained unchanged in the past few months as investors continue watching the happenings in Turkey. As such, while the US dollar index (DXY) has plunged by about 15% from its peak in 2022, the USD/TRY pair has remained stuck in a tight range. This price action is likely because of the ongoing liraization strategy by the CBRT that is encouraging more lira deposits.
The USD/TRY reacted modestly to the latest CBRT interest rate decision. In it, the bank decided to leave interest rate unchanged at 9% for the second straight month. Rates remain significantly lower than last year’s peak of 14%. With the Turkish inflation easing – but remaining high – there is a likelihood that the CBRT will cut rates again in 2023. Besides, there is a presidential election in May, which Erdogan is keen to win.
The USD to TRY exchange rate will react mildly to the upcoming American GDP numbers. Economists expect the data to show that the American economy expanded by 2.6% in the Q4. These numbers will come a week ahead of the first Federal Reserve decision.
USD/TRY exchange rate forecast
There is nothing much to say about the Turkish lira. The USDTRY has remained in a deep slumber close to its all-time high. Volume has dropped while the pair is trading at the 25-day and 50-day moving averages. Similarly, the Average True Range (ATR) has flattened, in a sign that there is no volatility.
Therefore, it is highly unlikely that the Turkish lira will rebound or retreat this week. As such, the pair will remain in this range for a while. A change will only come when there is a major Turkish news.
