- The USD/TRY is near 30.60300 as of this writing and delivering a steady fast stream of price changes for speculators who decide they want to pursue the currency pair.
- The current values for the Turkish Lira are record highs and this comes as no surprise to financial institutions or speculators familiar with the USD/TRY.
- While the currency pair certainly moves in a USD centric fashion on occasion, plenty of its impetus comes from the disregard for fiscal policy by the Turkish government which causes inflation.
Turkey’s Central Bank Governor Hafize Gaye Erkan resigned her post recently, and now has been replaced by Fatih Karahan. Both Erkan and Karahan are respected central bankers by financial institutions. The newly appointed Mr. Karahan is viewed as a monetary policy hawk regarding the Turkish Lira.
Turkish Government and Central Bank Interaction
Erkan who took over in early June of last year for Turkey’s Central Bank was professional. Her resignation it has been suggested came after facing criticism from some officials in the Turkish government. Her leadership for over half a year was seen as pragmatic. Now Mr. Karahan, who has experience with the New York Federal Reserve, takes the reigns and the question, becomes how much freedom Mr. Karahan will be given as the new Turkish Central Bank Governor.
The current value of the USD/TRY has shown an almost polite incremental rise since the 23rd of June 2023. Short-term technical traders may want to look at one year charts of the USD/TRY to gain perspective. The currency pair has almost behaved in a ‘normal’ trading mode since last June. The resignation of Erkan and replacement with Karhan seems to have kept financial institutions calm for the time being. The trend higher since June of 2023 has been much more stable than the previous couple of years for the USD/TRY which frequently displayed volatile surges.
Speculative USD/TRY Notions and Risk Management
The monetary policy by the Turkish Central Bank has a direct correlation to the oversight and potential interference that some officials in Turkey’s government can inflict. The USD/TRY has sustained value over the 30.00000 level since the middle of January. Betting on the USD/TRY to actually trade lower for more than a possible brief reversal still remains overly ambitious. The USD/TRY path continues to look upwards until financial institutions no longer face the onslaught of inflation in Turkey.
- Traders pursuing the USD/TRY need to use entry price orders to get a realistic fill.
- Quick hitting targets remain the best tactic for day traders. Risk management needs to include an understanding of potential fees that are charged while speculating on the USD/TRY.
Turkish Lira Short Term Outlook:
Current Resistance: 30.60500
Current Support: 30.58630
High Target: 30.61100
Low Target: 30.57450
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