In Thursday’s session, the USD/TRY gained more ground and broke with the 27.00 barrier while investors digested the fresh Central Bank of the Republic
Due to the Fed’s hawkish pause, US yields continue to rise, pushing the pair to the upside.
In Thursday’s session, the USD/TRY gained more ground and broke the 27.00 barrier while investors digested the fresh Central Bank of the Republic of Türkiye and Federal Reserve decisions. On the TRY’s side, the CBRT hiked rates by 500 bps to 30% and reflected the urgency of Turkish policymakers to fight its double-digit inflation, which rose above 58% YoY last month. It's worth noting that the bank started a new tightening cycle in June after years of an accommodative policy.
On the USD side, the US Federal Reserve decided on Wednesday to hold the federal funds rate at the 5.25% to 5.5% range, consistent with market expectations. The Fed's policy statement acknowledged the ongoing solid pace of economic growth while recognising a moderation in job gains, but remained robust.
As a reaction, US yields are seeing gains across the curve and stand at multi-year highs, which explains the strength of the USD and the pair’s upward movements. The 10-year rate rose to 4.46%, while the 2- and 5-year yields stood at 5.16% and 4.62%.for the short term. The Relative Strength Index and Moving Average Convergence Divergence remain in positive territory, with the RSI above its midline and showing a northward slope.
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