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Lira Pares Post-FOMC Gains on Resurgent USD, Poor Inflation Data

TURKEY
  • USD/TRY trades +0.69% higher this morning, erasing the entire post-FOMC move lower on the back of resurgent USD strength and poor pricing data.
  • PPI & CPI surged to 121.90% & 69.97% y/y – surpassing expectations and reminding markets of the severe issues on the ground as the Ukraine crisis and unsustainable monetary policy drive prices higher.
  • Sustained upside momentum will continue to weigh on TRY assets across the board in the absence of tighter monetary policy – especially when set against a tightening external backdrop and widening trade deficits.
  • However, the CBRT remains resolute in its position and is unlikely to make a policy U-turn any time soon.
  • USD/TRY price action should trade in line with USD-side movements today as markets digest the FOMC meeting. Intraday Sup1: 14.7811, Sup2: 14.74, Res1: 14.8366, Res2: 14.903
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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