Recent forecasts suggest a complex interplay between the US dollar (USD) and the Turkish lira (TRY), influenced by economic conditions and political dynamics in both countries. As of early September 2025, the USD has displayed strength due to a risk-off sentiment in the market. An unexpected increase in the ISM services PMI provided the greenback with renewed support, despite mixed signals from the US labor market. Analysts highlight that the upcoming non-farm payrolls report could significantly influence the USD's trajectory, particularly if it underperforms expectations, potentially raising bets on further interest rate cuts by the Federal Reserve.
For the TRY, the central bank's recent policy shifts have drawn attention. Turkey's decision to end its foreign exchange-protected deposit scheme aims to move away from unconventional economic practices, which previously contributed to currency instability. Inflation remains a persistent issue, with an anticipated decline to 32.6% year-on-year in August showing some signs of stabilization. However, political turmoil, including the arrest of a prominent opposition leader, has led to economic uncertainty, prompting the central bank to raise interest rates and intervene in the currency market to stabilize the lira.
Market experts note that the TRY is currently trading at 0.024266 to the USD, which is approximately 2.2% lower than its three-month average of 0.024813. This decline reflects a relatively stable trading range of 5.3% over the past months. The impact of recent monetary policy changes and ongoing political tensions in Turkey will likely continue to influence the lira, while external factors such as US inflation data and trade dynamics with China may further affect USD valuation.
In summary, the outlook for the TRY against the USD remains challenging, with significant volatility driven by both domestic and international factors. Stakeholders are advised to monitor these developments closely, as they could present opportunities for more favorable exchange rate movements in international transactions.
