• USD/TRY advances to new record highs above 10.0000.
• The CBRT meets on Thursday and could reduce rates further.
• Markets’ consensus points to a 100bps rate cut.

The Turkish lira depreciates (much) further and pushes USD/TRY to new all-time highs past the psychological 10.0000 mark on Monday.

USD/TRY: Door open to extra upside near term

USD/TRY adds to Friday’s advance and extends the rally well north of the critical 10.0000 mark, clinching at the same time the fifth consecutive session with gains.

Further losses in the lira are likely in the short-term horizon, as bets on the likeliness that the Turkish central bank (CBRT) could reduce the policy rate by 100 bps at its meeting on Thursday, taking the One-Week Repo Rate to 15%, remain well on the rise.

In the domestic calendar, House Sales rose by 14.9%, or 137.401K units, in the year to October. In the US, the NY Empire State Index improved to 30.9 for the month of November.

USD/TRY key levels

So far, the pair is gaining 0.88% at 10.0545 and a drop below 9.6285 (20-day SMA) would expose 9.4722 (monthly low Nov.2) and finally 9.4128 (weekly low Oct.26). On the other hand, the next up barrier lines up at 10.0566 (all-time high Nov.12) followed by 11.0000 (psychological level).