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  • The Turkish lira depreciates well past the 8.00 mark vs. the dollar.
  • Geopolitical jitters continue to put extra pressure on Ankara.
  • A generalized disappointment on the recent CBRT’s decision weighs on TRY.

The Turkish lira drops to fresh lows vs. the greenback and pushes USD/TRY to new all-time highs near 8.10 at the beginning of the week.

USD/TRY looks to geopolitics, CBRT

USD/TRY edges higher on Monday following renewed geopolitical concerns surrounding Ankara against the backdrop of rising bets of US and EU sanctions against the country. It is worth recalling that Turkey faces conflicts vs. Greece in the Eastern Mediterranean and the Caucasus amidst the Armenian-Azeri dispute.

In addition, market sentiment around the lira remains sour, as market participants continue to digest last week’s (big) disappointment by the Turkish central bank (CBRT) after it left the One-Week Repo Rate unchanged at 10.25%.

Adding pressure to the already fragile monetary scenario in Turkey, state-owned lenders sold more than $400 million at the beginning of the week in a fruitless effort to support the beleaguered lira.

It is worth noting that the lira has depreciated nearly 27% so far this year.

USD/TRY key levels

At the moment the pair is gaining 1.75% at 8.0835 and faces the next hurdle at 8.0964(all-time high Oct.22). On the downside, a drop below 7.7787 (low Oct.22) would expose 7.6294 (monthly low Oct.1) and finally 7.5945 (55-day SMA)