The moderation in U.S.-Iran tensions...>

TURKISH LIRA: The moderation in U.S.-Iran tensions pulled the rug from beneath

USD/TRY yesterday, just as the pair was nearing the psychological TRY6.0000

level. U.S. President Trump's apparent preference for economic sanctions rather

than military action, as a means of pressuring Iran, helped sooth earlier

worries & drove the bulk of yesterday's sell-off in USD/TRY.

- The rate failed to consolidate aforementioned losses. The Asia-Pacific session

saw it climb ~165 pips, even as riskier assets were generally stronger. It last

trades at TRY5.9247, with bulls keeping an eye on the multi-month high of

TRY5.9879 printed yesterday. A break above the level would bring the TRY6.0000

figure back into play. Bears look for a fall below TRY5.9000, as yesterday's

slide ground to a halt just 20 pips north of that psychological barrier.

- Worth noting that TRY showed a relatively muted reaction to heightened

U.S.-Iran tensions before they moderated yesterday. BBG reported that Turkish

state-owned lenders sold USD/TRY to protect the domestic currency.

- Turkish Pres Erdogan said that Turkey could mediate between the U.S. and Iran.

- The local unemployment data is due on Friday; the CBRT meets next week.