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  • The Turkish Lira dropped to new all-time highs above 4.66 vs. the buck.
  • TRY is the worst performing currency on a daily basis.
  • All eyes remain on the CBRT and Erdogan.

Another day, another drop in the Turkish Lira. USD/TRY is now easing from earlier new all-time highs above the 4.66 handle, navigating around 4.64/65.

USD/TRY looks to CBRT, Erdogan

TRY continues to depreciate this week, losing around 25% so far this year. Today’s up move in the pair comes despite the softer tone in the greenback, although the political/economic situation in Turkey continues to prevail as the exclusive driver behind the currency’s rout.

TRY came under renewed selling pressure after President Erdogan commented last week that he intends to take further control of the country’s monetary policy in the near future.

In addition, Erdogan’s preferences for lower rates are well known to market participants – particularly as elections in the country are imminent – despite that plots against already increasing inflation and the willingness of Governor Cetinkaya.

In the meantime, investors keep pricing in an emergency rate hike at some point in the (very) near future, likely between 100-200 bps.

USD/TRY key levels

At the moment the pair is up 1.75% at 4.6539 facing the next hurdle at today’s all-time high at 4.6645. On the flip side, the next support is located at 4.4250 (10-day sma) followed by 4.2812 (21-day sma) and then 4.2197 (low May 10).