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  • USD/TRY clinches fresh all-time highs around 7.83.
  • Geopolitical tensions add to the fragile outlook for the lira.
  • Economic Confidence Index, PMI CBRT minutes next on tap.

The lira debilitates further at the beginning of the trading week and lifts USD/TRY to a new all-time high beyond 7.8300.

USD/TRY stronger on TRY-selling, geopolitics

The Turkish lira comes under extra downside pressure on Monday following renewed concerns on the geopolitical scenario. In fact, clashes between Armenian and Azerbaijan forces over the Nagorno-Karabakh territory could see Russia and Turkey facing each other, as both countries support opposing parties in the conflict.

Still on the geopolitical scenario, it is worth recalling that Turkey and Greece still have an open dispute in the Eastern Mediterranean, which is also seen as a source of weakness for the lira.

As the lira continues to depreciate (practically) by the day, investors are closely following any domestic developments/announcements in the wake of last week’s interest rate hike by the Turkish central bank (CBRT), at the same time trying to answer the million-dollar question: will that be enough to calm markets?.

In the Turkish docket, the Economic Confidence gauge is due on Tuesday, Trade Balance results on Wednesday and the manufacturing PMI and the CBRT Minutes on Thursday.

USD/TRY key levels

At the moment the pair is gaining 1.50% at 7.7715 and faces the next hurdle at 7.8332 (all-time high Sep.28). On the downside, a drop below 7.5082 (low Sep.25) would expose 7.4124 (low Sep.10) and finally 7.2019 (low Aug.21).