Slump in Turkish Lira Continues, USDTRY Nears Five Level
TRY talking points:
- USDTRY has hit a record high and further gains towards the 5.0 mark now seem likely.
- That has helped weaken emerging market currencies more generally.
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Turkish Lira in freefall
The Turkish Lira remains under severe pressure Wednesday, with USDTRY nearing the 5.0 level for the first time and emerging market currencies more generally suffering as a result. The Lira has been undermined by Turkish President Recep Tayyip Erdogan’s promise to take even more control of the country’s economy and take more responsibility for monetary policy.
In addition, concerns about the Turkish elections due on June 24 are hitting sentiment as the markets worry about the Central Bank of Turkey losing its independence.
USDTRY Price Chart, Daily Timeframe (Year to Date)
The strength of the US Dollar and higher oil prices are additional worries even though, as the chart above shows, USDTRY has now been overbought judging by the 14-day relative strength index, or RSI, which is now well above the 70 level.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.