The USD to TRY exchange rate has seen notable movements recently, primarily driven by both U.S. and Turkish economic indicators. As of now, the USD is trading at around 40.79 TRY, reaching 90-day highs and 2.4% above its 3-month average of 39.83. This increase places the exchange rate within a relatively stable range of 5.4%, oscillating between 38.70 and 40.79.
Recent U.S. economic data has contributed to fluctuations in the dollar's value. Analysts noted that the latest consumer price index (CPI) reported a headline inflation rate of 2.7% for July, slightly lower than the anticipated 2.8%. This cooler inflation figure has sparked concerns regarding the dollar's strength moving forward. Moreover, upcoming inflation data and geopolitical issues, such as U.S.-China trade tensions, are expected to further influence the dollar's trajectory. The imminent leadership transition at the Federal Reserve may also bring additional volatility, as new leadership could redefine the Fed's approach to monetary policy.
On the Turkish side, significant factors are weighing on the lira's performance. The imminent termination of Turkey's FX-protected deposit scheme, which has substantially absorbed government resources, is poised to create further pressure on the lira. Additionally, the Central Bank of Turkey is likely to resume an easing cycle following a recent rate hike. While Finance Minister Mehmet Şimşek projects inflation could align within the central bank's range of 19% to 29% by year-end, the looming political unrest, especially following the arrest of Istanbul Mayor Ekrem İmamoğlu, adds layers of uncertainty to investor confidence.
Overall, market experts suggest that both U.S. economic indicators and legislative changes in Turkey will be critical in guiding the USD to TRY exchange rate in the upcoming weeks. Investors should remain vigilant regarding geopolitical developments and economic policy shifts, as these elements will likely determine the exchange rate's direction and stability.
