Turkish lira (USDTRY) gives up over 0.48 percent against the greenback as we approach Turkey’s central Bank next policy meeting on July 25 at 11:00GMT. The economist’s expectation is for an interest rate by cut by 250 bps from its current 24%. Turkey’s central bank kept the one-week repo rate at 24% in June 2019.
Last week, Fitch Downgraded Turkey to junk status, and warned of deteriorating independence and economic policy credibility after President Erdogan removed Cetinkaya as his central bank chief last week. Governor Cetinkaya, whose term was due to 2020, was replaced by deputy Murat Uysal, who was the deputy governor for three years and is one of the more dovish members of Policy Committee.
TRY lost over 8 percent of its value against greenback this year, the worst performer in emerging currencies after the Argentine Peso (ARS). On the technical side the USDTRY will find support at 5.6065 the 150 day moving average while more bids will emerge at 5.55 round figure. On the upside first resistance stands at 5.6955 the 20 day moving average, then at 5.7507, the 100 day moving average, while more resistance will be met at 6.19 the high from May 8th. The pair will face the two policy decisions from Fed next week and Turkey Central Bank this week that will add to volatility, so traders have to be very cautious.Don’t miss a beat! Follow us on Twitter.