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  • USD/TRY climbs to fresh record highs around the 8.53 level.
  • All the attention is on the US presidential elections.
  • Turkey’s CPI rose 2.13% MoM and 11.89% YoY.

The Turkish lira remains in free-fall and lifts USD/TRY to new all-time highs in the boundaries of the 8.53 mark on Tuesday.

USD/TRY looks to US elections

USD/TRY extends the march north for yet another session, this time quickly leaving behind the 8.50 mark and advancing to another record high amidst the unabated selling pressure hurting the Turkish currency.

Adding pressure to the lira, US polls continue to show a clear lead from Democrat candidate Joe Biden, who is expected to “punish” Ankara via sanctions following the purchase of the S-400 missile defence system.

Earlier in the session, the Turkish central bank raised the interest rate on the lira swaps to 13.25% from 11.75% in another (futile) attempt to prevent the currency from weakening further (via higher funding costs for TRY). The CBRT, therefore, continues to (stealth) tightening the monetary conditions by methods other than an outright interest rate hike (of at least 500 bps).

In the domestic docket, inflation figures in Turkey showed the CPI rose at a monthly 2.13% and 11.89% from a year earlier.

USD/TRY key levels

At the moment the pair is gaining 1.48% at 8.5292 and faces the next hurdle at 8.5294 (all-time high Oct.30). 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).