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USD/TRY Wobbles as War Risks Expose Turkey's Vulnerability to Oil/Gas Imports

TURKEY
  • USD/TRY trades -0.10% lower this morning, mirroring early price action in the BBDXY.
  • The cross found support at 13.50 yesterday, rising +0.51% as concerns over the Russia-Ukraine crisis dented global risk sentiment with traders reminded of Turkey’s vulnerability to rising oil/gas prices and reduced tourism receipts from Russia in the event of an escalation in the crisis.
  • A run on the Lira would be met with extensive reserve depletion defending the 14.00 level and promises to citizens and investors alike for a stable currency.
  • Nevertheless, a number of pathways to de-escalation in Ukraine have emerged with Lavrov still seeing scope for negotiation while military drills in Belarus draw closer to their conclusion on Feb 20.
  • Today’s focus will be on US PPI data following last week’s upside surprise in CPI which precipitated extensive USD-side volatility on an upside surprise.
  • USD/TRY remains pegged within the 13.30-13.6614 range, awaiting a breakout to determine a more decisive near-term direction.
  • Intraday Sup1: 13.5489, Sup2: 13.5087, Res1: 13.6344, Res2: 13.6614
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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