TRY/USD: Turkish lira to USD and pound exchange rates gets oversold

July 05, 2023 01:44 AM AEST | By Invezz

TRY/USD: Turkish lira to USD and pound exchange rates gets oversold — Image source: Invezz

Turkey inflation data ahead

The Turkish lira has been in a strong downward trend in the past few months even as some parts of the economy did well. For example, the tourism sector is booming, with the weak lira helping foreigners find bargains.

Data published on Monday showed that the manufacturing PMI rose to 51 in June. A PMI reading of 50 and above is a sign that the sector was still expanding. Additional data showed that Turkish retail sales jumped by 0.9% in April.

The most recent Turkish lira news was that banks have started intervening in the forex market. According to Bloomberg, banks sold as much as $1 billion by midday to prop up the currency.

Looking ahead, the next important catalyst for the Turkish lira will be the upcoming inflation data scheduled for Thursday. Economists believe that the headline consumer price index (CPI) dropped slightly from 39.47% in June. It peaked at about 90% in 2022. On a MoM basis, analysts expect that inflation rose to 4.84%.

The inflation data will come a few days after the Turkish central bank delivered its interest rate decision. It decided to hike rates to 15% in June as it restarted its battle against inflation. As I wrote here, economists expected the bank to hike by over 20%.

Watch here: https://www.youtube.com/embed/UGoJrk39NHc?feature=oembed

The challenge for the lira is that many people in Turkey and international investors have lost interest in the currency. As such, the currency will likely continue falling as long as Erdogan is president. Besides, it has already plunged by more than 80% in the past five years.

Turkish lira to USD forecast

TRY/USD chart by TradingView

The daily chart shows that the TRY/USD has been in a strong bearish trend in the past few months. It has plunged below all moving averages while the Relative Strength Index (RSI) has moved below the oversold level.

Therefore, the Turkish lira to USD and GBP will likely continue falling as sellers target the next key level at 0.035 and 0.025, respectively.

The post TRY/USD: Turkish lira to USD and pound exchange rates gets oversold appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.