USD/TRY set to test the 10.00 level as CBRT may cut rates by 1% – SocGen

The Turkish lira has plummeted to a record low of 9.9859 against the US dollar. Economists at Société Générale expect the pair to challenge the 10.00 psychological level as the Central Bank of the Republic of Turkey (CBRT) may deliver a 100bp rate cut next week.

CBRT to go on with a 100bp rate cut

“A test of 10.00/USD looms as markets position for the possibility of a 100bp rate cut by the CBRT next week.” 

“USD/TRY experienced a brief pause recently as it tested the upper limit of a multi-month ascending channel. It has now overcome this band which points towards extension in uptrend.” 

“It is worth noting that the pair has consistently defended the short-term 10-DMA since September. Holding above the MA at 9.73/9.66, the pair looks poised to head higher towards next projections at 10.16 and 10.31/10.36.”