USDTRY update

USDTRY weekly chart shows that the marked tuned around as expected at the 1.55 support area, which was also the 38.2% retracement level. That marks the end of this wave down but we will see another attempt in the summer. One crucial factor is the new Dollar strength overall which is heading now for our overall Dollar Index target around 100.
We can expect the TRY to rise to the 1.68 but rather 1.75 area in short time as the global markets are entering a volatile correction now after a steep rally. That will take away some carry-trade appetite and Turkey has basically entered deep negative interest rate territory as real inflation rather runs at 20% and the risk reward after severe interest rate cuts are too low to run risks. The government is running a risky path as it has expanded it conspiracy investigations on a wider scale and had already quite some losses on local elections recently. They expect desperately the IMF injection of funds (up to 50 bil .) which could happen by mid May. This although expected will trigger another run on the TRY briefly. The rate cuts of the central banks have not been passed on to mainstreet and is actually just to save the bank sector which runs into deeper trouble going forward but has now a bigger margin to regain some losses from real estate losses.


~ by behindthematrix on April 20, 2009.

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