The USDTRY has hit 18-month highs this Wednesday after yesterday’s pullback, on the report that Turkey now has the fastest rate of coronavirus spread in the world. Yesterday’s data from Worldometer shows that Turkey’s number of new cases ranks 5th, trailing those of the United States, France, Spain and Germany. However, Turkey’s percentage of new cases to that of the total number of its coronavirus cases stands at 11.41%, making it the highest in the world. France comes close at 10.1%, followed by the US at 8.33%.
Turkey has not implemented the stringent restrictions on movement and business operations that other countries have, with President Erdogan continuing to insist that work must continue to allow the economy to grow. Yesterday, the Central Bank of the Republic of Turkey (CBRT) purchased government bonds worth 5 billion lira ($742 million) from the country’s primary bond market, the Unemployment Insurance Fund. Bond purchases have been stepped up to record levels by the CBRT to attempt to stave off the negative impact of the coronavirus outbreak, which has already hit the country’s tourism industry very severely.
The USDTRY is currently trading at 6.71443 and is 1.05% higher this week. It had earlier traded at August 2018 highs at 6.79198 before retreating mildly to test the resistance provided by those highs. A break above those highs would bring 6.83748 into focus (29 August 2018 highs), with the 13 August 2018 highs at 6.95895 lying in wait just ahead.
To the downside, support continues to rest at 6.71870 and also at 6.60841. 6.38445 may also become available if a pullback can break below the two previous support levels. However, sentiment continues to remain bullish, and traders may use any of the pullback levels as areas to attain cheaper dip-buying entries.