The USD to TRY exchange rate shows a bearish bias.
Key drivers include the Federal Reserve's plan for rate cuts, which is likely to weaken the USD as it aims to stimulate the economy. Meanwhile, the Turkish Central Bank is expected to ease its monetary policy further, forecasting additional rate cuts that could lead to continued depreciation of the TRY. Inflation trends in both economies also play a vital role, with Turkey targeting a 16% inflation rate while the U.S. has seen a recent drop to 2.7%.
In the near term, the exchange rate could fluctuate within a stable range, having recently peaked near 42.96, slightly above its three-month average.
Upside risks could emerge from stronger-than-expected U.S. economic data, potentially lifting the USD. Conversely, significant shocks to global markets or further deterioration in Turkey’s economic outlook could lead to a sharper decline in the TRY.
