The USD to TRY exchange rate has a bearish bias as recent economic data indicates a potential decline in the value of the US dollar. Key drivers include the interest rate differential, with the Federal Reserve expected to implement several rate cuts by mid-2026, which may weaken the USD. Furthermore, the Turkish central bank is projected to continue its easing cycle, with expectations of a further rate reduction, also influencing the TRY.
Macro factors such as inflation trends are crucial; the Turkish central bank has an inflation target of 16% by the end of 2026, despite rising prices. Currently, the USD to TRY rate is trading at near 90-day highs, suggesting some volatility but remaining within a stable range at slightly above its 3-month average.
In the near term, the USD to TRY rate is expected to experience fluctuations but likely stay within the current elevated levels. Upside risks could stem from stronger-than-expected US economic data, fostering confidence in the USD. Conversely, a significant deterioration in Turkey’s economic situation or accelerated inflation could further pressure the TRY.
