The USD/TRY is recovering, but it is still not out of the woods.
CBRT raises FX reserve requirements, causing the lira to rise.
The pair is looking for further impetus from the US ISM PMI and NFP data.
USD/TRY is consolidating a quick rebound from daily lows of 8.6565, aided by the US dollar’s persistent buying activity across the board.
As the US dollar index flirts with three-month highs of 92.54, rising Delta covid strain fears and the Fed’s hawkish monetary policy stance are supporting the greenback’s further gain.
The lira bulls, on the other hand, are fighting for control for the second day in a row on Thursday. The lira had a wild ride earlier in the European session before plummeting to daily lows in response to the Turkish central bank’s (CBRT) announcement of steps aimed at bolstering currency holdings in the banking system.
The CBRT announced that necessary reserve ratios on foreign currency deposits would be increased. “The needed reserves revisions would result in a 13.2 billion lira ($1.52 billion) and $2.7 billion increase in Turkish lira and forex-denominated required reserves, respectively,” the bank stated.
The pair now awaits the release of the US ISM Manufacturing PMI data for new trade impetus, while the NFP report on Friday will be the primary determinant of the dollar’s price direction in the immediate term.
The upside is still protected by the upward-sloping 21-Daily Moving Average (DMA) at 8.6351. Any persistent fall below the latter could result in a severe sell-off towards the bullish 50-day moving average of 8.7480. Acceptance above the horizontal trendline resistance at 8.80, on the other hand, might expose the 9.00 threshold, signifying new highs./n
