USD/TRY climbs to fresh tops above 3.64

Another day, another historical low for the Turkish Lira. In fact, USD/TRY has quickly climbed to fresh all-time tops just above the 3.6400 handle on Thursday.

USD/TRY higher as TRY tumbles

TRY remains on the defensive at the beginning of the year, extending the selling bias into the first sessions of 2017 after dropping around 17% during 2016, the worst performer EM currency after the Argentine peso.

The Lira clinched fresh historical lows vs. the greenback on Tuesday as political and geopolitical jitters keep weighing on sentiment, aggravated as of late in response to the attack at a night club in Istanbul over the past weekend.

Additionally, inflation figures in the domestic economy have come in higher than expected during December, with consumer prices rising at an annualized 8.53%, the highest level since July 2016.

Adding to TRY uncertainty, the conflict between the government and the central bank’s (CBRT) authorities seems far from over. Recall that the government keeps the CBRT under pressure in order to prevent the central bank to hike rates, undermining any attempt of a recovery in the currency, at least in the short term.

USD/TRY key levels

At the moment the pair is up 1.61% at 3.6173 facing the next hurdle at today’s fresh all-time high at 3.6403. On the other hand, the next support lines up at 3.5274 (20-day sma) followed by 3.4500 (low Dec.13) and then 3.3722 (55-day sma).