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  • USD/TRY navigates new all-time highs near 8.45.
  • Geopolitics, CBRT concerns keep weighing on the lira.
  • Focus is on the US presidential elections on Tuesday.

The Turkish lira depreciates to fresh all-time lows vs. the US dollar and lifts USD/TRY to the vicinity of 8.45 at the beginning of the week.

USD/TRY looks to geopolitics, US elections

USD/TRY is extending the march north unabated for yet another session on Monday, always on the back of the persistent deterioration of the Turkish currency, while investors’ bias towards the safe havens also collaborates with the move up.

In addition, no news from the Turkish central bank (CBRT) morphs into extra loss of confidence from investors in both the central bank and the country. The former largely expected to deliver some kind of emergency interest rate hike. However, President Erdogan’s comments over the weekend that the country is waging a war against “the devil’s triangle of interest rate and exchange rates and inflation” makes any intervention of the CBRT a wishful thinking (being extremely optimistic).

Looking at the geopolitical front, there are no improvements in neither the Caucasus or the Eastern Mediterranean conflicts, where Turkey remains directly involved.

However, all the attention will be on the US elections on Tuesday, as a Democrat win could add to the possibility of US sanctions against Ankara following the purchase of the Russian defence system.

In the meantime, the lira already lost nearly 30% so far this year.

USD/TRY key levels

At the moment the pair is gaining 0.99% at 8.4370 and faces the next hurdle at 8.4393 (all-time high Nov.2). On the downside, a drop below 7.7787 (low Oct.22) would expose 7.6294 (monthly low Oct.1) and finally 7.5082 (low Sep.25).