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CPI a Key Tail Risk to TRY Optimism This Week

TURKEY
  • USD/TRY opens lower to follow on from a stronger APAC session after decisively breaking the 200dma on Friday.
  • Spot now trading just above 07 jan lows at 7.2406 on broad based TRY optimism reinforced by a hawkish CBRT and wide real yield/ carry appeal.
  • Volatile global risk sentiment has been the primary hurdle to more USD/TRY downside, but looks to be taking a breather in the early part of today's session.
  • A move through the prior low should open up the probability of the cross taking the next leg lower. Thursday & Friday saw a robust shift in bond flows following Agbal's inflation report and may continue to support TRY in the near-term.
  • Focus this week on CPI data, with upside surprises being the key tail risk to derailing recent TRY optimism.
  • Res1: 7.3109, Res2: 7.3483, Sup1: 7.2406, Sup2: 7.2165, Sup3: 7.0699
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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