You don’t have to be an analyst to be able to tell what a disappointment USD/TRY pair has been this year. Turkish Lira is on track to closing four consecutive months of downtrend against the US dollar. In fact, since December 2021, USDTRY has seen only two red months.
This price action could be attributed to the record inflation and the investors ditching Lira-based investment products for the greenback. If you have been following my analysis on the forex pair, you must know that I discussed the possibility of USD/TRY hitting 30 by the end of 2023.
While this forecast hasn’t been perfectly met, the pair has plunged 20% since then and currently stands at 29.157 which is the highest level in its history. It’s as if there’s no limit to the devaluation of the Lira, which just keeps sinking in a bearish continuation without any notable bounce.
It’s needless to perform a technical analysis on the following chart as it is trading more than 100% above its 200-day moving average, which is very rare for any currency pair.
Despite seven consecutive rate hikes by the Turkish Central Bank, the USD/TRY forecast is still looking very bullish as the pair keeps making new highs every day. The central bank raised interest rates by another 250bps after a critical meeting on Thursday.