The current market bias for the AUD/TRY exchange rate is bearish.
Key drivers include:
- The Reserve Bank of Australia (RBA) is signaling potential interest rate hikes in the future due to rising inflation risks, which may support the AUD.
- Conversely, Turkey's Central Bank has recently cut interest rates, indicating a cautious monetary easing approach amidst ongoing inflation, which can weaken the TRY.
- Inflation pressures are significant, with Turkish inflation rising, mainly driven by food prices, while China's slow recovery dampens demand for Australian exports, impacting the AUD negatively.
In the near term, expect the AUD/TRY to trade within a slightly elevated range compared to its three-month average. What could change this outlook are potential stronger economic indicators from China, encouraging AUD strength, while ongoing inflation woes in Turkey could lead to further depreciation of the TRY.