Recent currency market updates indicate a weakening trend for the US dollar (USD). Analysts note that the recent USD rally has lost momentum, attributed to corrections across equity markets and concerns over a potential US government shutdown. Additionally, doubts are surfacing regarding the extent of the Federal Reserve's rate hikes, suggesting that previous expectations may have been excessive. With limited significant data expected from the US, market movements appear closely tied to broader trends.
The Turkish lira (TRY) has faced a challenging environment influenced by several key developments. Notably, Turkey's recent termination of the foreign exchange-protected deposit scheme has raised concerns, as it previously cost the country approximately $60 billion. In a positive note, the European Bank for Reconstruction and Development upgraded Turkey's GDP growth forecast for 2025, slightly mitigating worries about the nation's economic outlook. However, the surge in annual inflation to 33.3% in September poses serious challenges for the central bank and could complicate future monetary policy decisions. Furthermore, the recent $4.9 billion currency swap agreement between Turkey and the UAE aims to enhance liquidity and facilitate transactions, potentially safeguarding against volatility.
Looking at the exchange rate data, the TRY to USD is currently at a 90-day low of approximately 0.023691, marking a decline of 1.8% from its three-month average. It has been trading within a relatively stable range, confirming a slight downward trend in comparison to previous months.
Given these forces at play, experts suggest that the outlook for the TRY and USD will remain influenced by a combination of domestic economic policies and global monetary developments. Currency forecasts will largely depend on how inflation trends are managed in Turkey and potential shifts in the Federal Reserve's approach to interest rates amid ongoing global economic pressures.
