USD/TRY Near All-Time Highs As CBRT Cuts 1-Week Repo Rate by 100bps


On Thursday, the Turkish Lira weakened against the US Dollar after the Central Bank of the Republic of Turkey (CBRT) surprisingly cut the interest rate from 19.00% to 18.00%. The USD/TRY leapt on the news and is now testing the 8.8000 all-time high. 

The dovish decision by the CBRT caught the markets by surprise, as the consensus had been for the CBRT to leave the 1-week repo rate unchanged.

Given yesterday’s hawkishness by the US Federal Reserve, the stage has been set for the USD/TRY to surge to new all-time highs if new demand can push the price past today’s intraday high. The USD/TRY is trading 1.17% higher as of writing at 8.74630.

USD/TRY Outlook

A break above 8.8000 takes the USD/TRY into record territory, initially targeting the 8.95736 price mark (78.6% Fibonacci extension). A subsequent advance allows 9.08339 to come into the picture, as does 9.22707 if this advance continues.

On the flip side, a decline towards 8.57488 or 8.49435 could occur as a result of profit-taking. This move will provide dip-buying opportunities. However, the dip-buying window is eliminated if the price declines below the 8.29080 support. This decline opens the door towards 8.19744 and 8.04069, in that order.

USD/TRY Daily Chart

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