The recent performance of the EUR/TRY exchange rate reflects several significant factors impacting both the euro and the Turkish lira. As of the latest data, the euro is trading at 48.84 TRY, which is 3.1% above its three-month average of 47.37. This movement occurs within a stable range of 7.9% over the last few months, showing a low volatility between 45.38 and 48.95.
Analysts note that the euro has gained strength recently due to better-than-expected economic data from Germany, particularly the ZEW economic sentiment index. This positive sentiment is reinforced by the euro's depreciation against the US dollar, providing further support for EUR exchange rates. Additionally, there are indications from ECB officials expressing a cautious stance on the euro's rapid appreciation which has risen by 14% against the USD this year, potentially affecting the Eurozone’s export competitiveness.
On the Turkish side, the lira remains under pressure due to soaring inflation forecasts, expected to reach 28.5% in 2025. This has led institutions like JPMorgan and Goldman Sachs to adjust their expectations for interest rate cuts by the central bank. There is also significant political instability marked by events such as the arrest of opposition leader Ekrem İmamoğlu, affecting investor confidence in Turkey's economy. The nearing end of an FX-protected deposit scheme further complicates the currency outlook.
Market reactions are also influenced by external factors, including oil prices. Despite oil currently trading at 67.95 USD, which is slightly below its three-month average, fluctuations in oil prices can impact the euro indirectly, particularly through energy costs that affect the Eurozone's inflation and economic stability.
Overall, the forecasts suggest that the EUR/TRY exchange rate will remain sensitive to developments in both the Eurozone and Turkey, including monetary policy adjustments and geopolitical events. Observers recommend monitoring the upcoming remarks from ECB President Christine Lagarde, as her statements may provide additional direction for the euro's performance against the lira in the near term.
