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TRY Wobbles as Erdogan Shifts Focus Back to the East Med, Western Tensions & S-400s

TURKEY
  • USD/TRY seen mostly flat around the open, having traded choppily in yesterday's mixed risk-off/on session.
  • Erdogan's second day of touring around Northern Cyprus finally elicited an international response, with the US condemning the occupation of parts of Varosha and vowing to pursue a strong response.
  • With his focus moving away from the CBRT momentarily, Erdogan seems to be shifting his attention back to the East Med, tensions with the West and S-400s after a period of relative calm in foreign relations.
  • Erdogan's rhetoric in his Cyprus speeches and support for the two-state solution and forming solid infrastructure on the island was undoubtedly more aggressive and is likely to provoke a reassessment of ties from both the EU & US and may see talk of more human rights/rule of law sanctions creep into the equation – all of which will weigh negatively on TRY.
  • In terms of price action, USD/TRY has seen buyers entering firmly in the 8.50-8.55 region, and may snap the recent downtrend started on 9 July if we see a confirmed break above 8.60.
  • Spot trades a fraction below the 50DMA, and will need to close above to re-establish a near-term uptrend.
  • Intraday Sup1: 8.5424, Sup2: 8.5037, Res1: 8.5981, Res2: 8.6399
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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