USD/TRY clinches another all-time high and looks to 8.40

• USD/TRY extends the march north to levels past 8.32.
• Pandemic jitters, geopolitics, monetary policy, all playing against TRY.
• The upside momentum in the dollar is also bolstering the move up.

USD/TRY hits another all-time high on Thursday, this time in levels just below the 8.33 mark.

USD/TRY weaker on geopolitics, CBRT decision

The Turkish lira keeps the march south well in place for the sixth session in a row on Thursday, lifting USD/TRY to the vicinity of the 8.33 mark against the usual fragile outlook surrounding the currency (to say the least).

The lira exacerbates the decline as market participants remain sceptical over the possibility of further action by the Turkish central bank (CBRT) in order to defend the currency, all following last week’s big disappointment after the Obe-Week Repo Rate was left unchanged. Consensus among investors point to an emergency interest rate hike (of at least 500 bps?) as the silver bullet to try to restore some credibility to the bank and the currency.

Adding to these domestic issues, geopolitical concerns also keep Turkey under the microscope, as the country faces a conflict vs. Greece in the Eastern Mediterranean and it is in the middle of the debate in the ongoing Azeri-Armenian dispute in the Caucasus.

So far, the lira lost more than 28% vs. the dollar this year and its current monthly performance is the worst since August 2018.

USD/TRY key levels

At the moment the pair is gaining 0.48% at 8.2963 and faces the next hurdle at 8.3260 (all-time high Oct.29). On the downside, a drop below 7.7787 (low Oct.22) would expose 7.6294 (monthly low Oct.1) and finally 7.5082 (low Sep.25).