The current market bias for USD to TRY is bullish, with the dollar gaining traction.
Key drivers include the expected Federal Reserve interest rate cuts, which could weaken the USD, while the Turkish Central Bank's easing policy amid persistent inflation pressures is likely to weaken the lira. Additionally, forecasts indicate that the TRY may face a depreciation as inflation remains a concern, coupled with external vulnerabilities impacting economic stability.
In the near term, the USD to TRY is expected to fluctuate within a range that suggests continued strength for the dollar against the lira.
An upside risk could arise from unexpected economic growth in Turkey or a stronger-than-expected performance of global commodities, which might stabilize the lira. On the downside, a rapid acceleration in Fed rate cuts or further deterioration in Turkey's economic outlook could lead to significant depreciation of the TRY.
