The market bias for the USD to TRY exchange rate is bearish.
The main drivers include the anticipated interest rate cuts by the Federal Reserve, which could lead to a weaker USD over the coming months. Additionally, the Central Bank of Turkey's plan to continue easing monetary policy suggests further weakening of the Turkish Lira amid persistent inflation pressures. Lastly, global economic growth and rising commodity prices may create volatility in both currencies, impacting their exchange rates.
Near-term, the USD to TRY is likely to trade within a range reflective of recent highs, remaining above January's three-month average.
An upside risk is the potential for stronger-than-expected U.S. economic indicators, which may support the USD. Conversely, a downside risk includes worsening inflation in Turkey, leading to more aggressive policy shifts from the Central Bank that could depress the TRY further.
