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Turkey Inflation Reaches 24-year High

11/4/2022 12:45 PM

The USD/TRY pair is moving within an extremely narrow corridor around the 17.9560 mark, artificially holding back from serious price fluctuations.

Except for the unprecedented rate of inflation in Turkey, which increased by 3.54% in October and reached a 24-year high of 85.51% YoY, the national gross domestic product (GDP) shows stable quarterly growth and, according to data for August, was 7.6%. The situation in the national labor market is also stable: in August, unemployment fell to 9.6% from 10.0% a month earlier. The Turkish authorities have been pursuing the so-called new economic policy since December last year, aimed, among other things, at strengthening the national currency. In particular, the Central Bank of the country is actively reducing interest rates (for example, the discount rate was corrected by 350 basis points to 10.5% in the last three months only) to increase production and exports to achieve a positive current account balance.

After several unsuccessful attempts, the US dollar consolidated above 112.000 in the USD Index. The key driver of this movement was the report on the labor market, according to which the number of initial applications for unemployment benefits fell to 217.0K from 218.0K a week earlier. Although the total number of citizens receiving subsidies in the United States is 1.485M people, which is up from 1.438M a week earlier, the statistics of the last four weeks show a positive trend, as the average number of applications for this period consolidated around 218.75K against 219.25K applications earlier.

The trading instrument is moving within the global sideways corridor, holding near the all-time high of 18.6000.

Technical indicators keep a stable buy signal: the range of EMA fluctuations on the Alligator indicator is directed upwards, and the histogram of the AO oscillator forms rising bars in the buying zone.

Resistance levels: 18.6300, 18.7000. | Support levels: 18.5880, 18.5200.

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