EUR/TRY Outlook: Bullish, as the rate is significantly above its recent average and nearing its recent highs amid supportive market trends.
Key drivers:
• The European Central Bank’s cautious monetary policy and anticipated economic growth in the Eurozone create a favorable environment for the euro against the Turkish lira.
• Oil prices are at recent highs, which typically help the euro as higher energy costs can prompt inflation and affect Turkey’s economy negatively, thereby supporting the euro.
• Turkey faces inflationary pressures that recently accelerated, creating uncertainty that weighs on the lira, especially after recent monetary easing by its central bank.
Range: The EUR/TRY is likely to drift within its recent range as it approaches the upper end, reflecting current market dynamics.
What could change it:
• An improvement in Turkey's economic indicators or a reversal of the current easing trend could strengthen the lira.
• If Eurozone data shows significant deterioration, it could weaken the euro and alter the current bullish outlook.
