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  • The Turkish currency drops around 2% on Erdogan comments.
  • The pair reached fresh tops near 6.56 ahead of CBRT.
  • All eyes on the Turkish central bank later in the day.

The Turkish Lira is quickly losing ground in the second half of the week and is pushing USD/TRY to fresh tops in levels just below 6.56.

USD/TRY weaker on Erdogan, looks to CBRT

TRY is down around 2% today and it has intensified the sell-off after President R.T.Erdogan advocated for lower interest rates in his comments earlier in the day, reiterating his well-know stance on rates.

Apart from ‘suggesting’ lower rates, Erdogan blamed the Turkish central bank (CBRT) for the escalating inflation, all in light of the bank’s imminent decision on rates and while consensus expects a rate hike of ‘at least’ 600 bps.

On the positive side, Erdogan also noted his preference for a free market economy.

USD/TRY key levels

At the moment the pair is gaining 1.45% at 6.4344 facing the next hurdle at 6.5100 (10-day SMA) seconded by 6.5582 (high Sep.13) and finally 7.2393 (all time high Aug.13). On the downside, a breach of 6.3239 (21-day SMA) would open the door to 5.9629 (Low Aug.26) and then 5.6675 (low Aug.16).

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