Solid News

USDTRY Market Update

9/2/2022 11:36 AM

The US dollar shows flat dynamics, holding near record highs and 18.2000. The situation on the market changes slightly, and the American currency is still in great demand against the backdrop of a deterioration in the outlook for the global economy and expectations of another increase in the interest rate by the US Federal Reserve. The regulator's meeting will be held next week and, following its results, the cost of borrowing can be increased by another 75 basis points for the third time in a row.

In turn, the Central Bank of Turkey, despite rising inflation, does not tighten monetary policy. Moreover, on August 19, the regulator lowered the interest rate by 100 basis points to 13.0%, despite the fact that the official inflation forecast is approaching the alarming level of 80.0%. According to President Recep Tayyip Erdogan, who is strongly opposed to raising the interest rate, tightening monetary conditions only leads to faster inflation. Instead, the head of state believes, it is necessary to further stimulate the economy to increase exports and lending.

Some support for the Turkish economy is provided by the fact that official Ankara decided to increase the cost of passage of ships through the Bosphorus and the Dardanelles by 5 times, abandoning the 75% discount that has been in effect since 1983. Thus, Turkey can receive an additional 200.0 million dollars in revenue per year. However, analysts point out that a significant part of this amount is likely to be spent on maintaining the infrastructure of the straits, the cost of which has also increased significantly in recent times.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is narrowing from below, reflecting the ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic retains upward direction but is located near its highs, which indicates the risks of overbought USD in the ultra-short term.

Resistance levels: 18.3000, 18.5000, 18.6500. | Support levels: 18.1500, 18.0264, 17.8550, 17.7500..

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