Bias: USD/TRY is bullish-to-range-bound, sitting above the 90-day average and in the upper half of the three-month range.
Key drivers:
- Rate gap: The US Federal Reserve is expected to ease toward neutral policy in 2026, while Turkey has started gradual easing but inflation stays high, keeping the USD relatively supported versus the TRY.
- Macro factor: Upcoming US payrolls and unemployment data will influence Fed easing bets and could tilt the dollar.
- Turkey debt: Turkey's 2026 domestic borrowing plan and ongoing bond auctions add funding pressure, reinforcing lira vulnerability even as the policy stance eases.
Range: USD/TRY should stay within the three-month range, with a slow drift toward the upper end rather than a sharp breakout.
What could change it:
- Upside risk: A hotter US jobs reading or hawkish Fed commentary delaying cuts could push USD higher against the TRY.
- Downside risk: Softer US data or clearer signs of Turkish inflation cooling and policy clarity could ease pressure on the lira.
