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Lira Bucks the Trend as EM FX Gains Against the USD

TURKEY
  • USD/TRY trades +0.15% higher, bucking broad EM strength vs the greenback in improved risk conditions.
  • The cross fell -0.15% in choppy fashion to reach an intraday low of 14.7481 before closing at 14.7897.
  • The trade deficit continued to widen in March reflecting Turkey’s ongoing issues with surging import prices and acute vulnerabilities to the Ukraine crisis.
  • TRY weakness is also weighing on exporters, who are now calling for changes to Government’s policies aimed at slowing dollarisation through forced FX conversions.
  • Next week the focus shifts to inflation data with headline metrics expected to rise to 69% y/y in headline – further deepening Turkey’s negative real policy rates.
  • Additional pressure from the Fed’s expected 50bp rate hike, should also add additional pressures on Turkish assets as the CBRT remains resolute in its stance on low policy rates.
  • Intraday Sup1: 14.7811, Sup2: 14.7634, Res1: 14.8138, Res2: 14.8316
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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