The USD to TRY exchange rate has recently reached 90-day highs near 42.70, which is approximately 1.5% above its three-month average of 42.05. The currency pair has shown considerable stability, oscillating within a 3.5% range from 41.24 to 42.70.
Regarding the US dollar, market expectations point towards a dovish Federal Reserve, with traders anticipating aggressive interest rate cuts beginning in early 2026. This has caused the dollar to weaken broadly, as expectations for multiple cuts start to translate into a lack of yield advantage for the USD. Current market sentiment indicates a growing risk-on attitude, leading to lower demand for the dollar as investors pivot towards equities and other risk assets.
Mixed economic indicators from the US complicate the outlook. While manufacturing data shows signs of slowing, the labor market remains robust, which may delay the Fed's rate cut intentions. If inflation data shifts lower, it could further bolster predictions for rate cuts, putting additional downward pressure on the dollar.
On the other hand, the Turkish lira's position remains delicate following significant policy adjustments by the Central Bank of the Republic of Turkey (CBRT). The CBRT recently reduced its policy interest rate to 39.5% in October, highlighting concerns over rising inflation, which is projected to exceed their targets. Turkey's economic growth outlook is also worrying, with recent polls indicating growth may lag behind government forecasts, contributing to potential long-term pressures on the lira.
In summary, analysts suggest that the USD to TRY rate is influenced by a complex interplay of US monetary policy expectations and Turkey’s economic conditions. The ongoing risks surrounding inflation, interest rates, and geopolitical stability will be crucial in shaping future movements in this currency pair. As market conditions evolve, careful attention to both US economic indicators and Turkish monetary policy will be essential for individuals and businesses engaged in international transactions.
