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  • USD/TRY climbs further north of the 7.60 level on Monday.
  • Wave of risk-off sentiment hits the EM FX space.
  • Risks of a Balance of Payments crisis in Turkey stay on the rise.

The Turkish lira depreciates further vs. the greenback at the beginning of the week, lifting USD/TRY to fresh all-time highs beyond the 7.61 mark.

USD/TRY up on TRY-selling, dollar’s rally

The Turkish currency accelerated its downside on Monday following headlines citing the country’s buffers against a crisis of the balance of payments could be depleted (or on the way to depletion).

It is worth recalling that agency Moody’s cut Turkey’s sovereign debt rating to “junk” last week (in line with those of Egypt, Rwanda and Jamaica), while revising lower the outlook to “negative”, always on the back of rising risks over a balance of payments crisis.

Adding to the upside momentum in the pair, the prevailing risk-off sentiment is also collaborating with the dollar’s firm demand.

In the docket, Turkey’s Consumer Confidence is due on Tuesday ahead of Manufacturing Confidence, Capacity Utilization and the CBRT monetary policy meeting on Thursday.

USD/TRY key levels

At the moment the pair is gaining 0.97% at 7.6144 and faces the next hurdle at 7.6170 (all-time high Sep.21). On the downside, immediate support is located at 7.4360 (21-day SMA) seconded by 7.4124 (low Sep.10) and then 7.2961 (low Aug.28).