USD/TRY keeps pushing higher, lost momentum near 4.94

• The Turkish Lira remains on the defensive vs. the greenback today.
• The pair approached the 4.94 handle, multi-day peaks.
• TRY remains under pressure amidst US-Turkey political effervescence.

The Turkish Lira is trading in fresh multi-day lows vs. the greenback and is lifting USD/TRY to the 4.92 neighbourhood.

USD/TRY looks to politics

TRY remains under heavy pressure following an escalation of threats between the US and Turkey after a Turkish court rejected an appeal by US pastor Andrew Brunson to be released after his long detainment.

Brunson is accused by the Turkish government of having links with the PKK and the FETO, both organizations signalled by Ankara to be behind the failed coup in 2016.

Further downside pressure on TRY is coming from President Trump’s threats of imposing sanctions against Turkey.

In addition, and back to the monetary policy front, the Turkish central bank (CBRT) announced on Tuesday it revised higher its outlook for domestic inflation. In fact, the CBRT now sees consumer prices rising between 12.5% and 14.3% by year-end in 2018, between 7.6% and 11.0% by end 2019 and 4.8% and 8.6% at end 2020.

USD/TRY key levels

At the moment the pair is gaining 0.16% at 4.9216 facing the next hurdle at 4.9393 (high Aug.1) seconded by 4.9721 (2018 high Jul.12) and then 5.0000 (psychological level). On the downside, a breach of 4.9104 (low Aug.1) would open the door to 4.8431 (10-day sma) and finally 4.7305 (low Jul.23).