EUR/TRY Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average, but lacks a clear driver.
Key drivers:
- Rate gap: The European Central Bank’s unchanged interest rate at 2% contrasts with Turkey's recent cuts, creating pressure on the Turkish Lira.
- Risk/commodities: The recent rise in oil prices may put additional pressure on inflation and impact the economies of both regions, influencing the EUR/TRY dynamic.
- Macro factor: Turkey's recent upgrade by Fitch reflects a strengthening outlook which may support the Lira against the Euro if it leads to improved investor confidence.
Range:
The EUR/TRY is likely to move within its recent stable range, holding above the average while facing potential fluctuations.
What could change it:
- Upside risk: A more hawkish stance from the ECB could boost the Euro further.
- Downside risk: Continued cuts or uncertainty in Turkey’s monetary policy may weaken the Lira.