ONLINE FOREX BROKER
2021-10-25 • Updated
The Turkish lira has been pressed by Turkey’s central bank (CBRT). It has recently announced a bigger-than-expected rate cut: twice as deep as analysts expected. The reduction occurred after President Erdogan fired central bank officials as opposed to his intention for lower borrowing rates. Most analysts and investment banks foresee USD/TRY to exceed the psychological mark of 10.00.
Bloomberg said, “there’s now a more than 60% chance that the lira will weaken to 10 before January”. SEB AB: “Unless the central bank signals an intention to slow the cuts, USD/TRY will spike well above 10.00”.Besides, today, the Turkish lira got another headwind from President Erdogan. He claimed he had ordered the expulsion of the US and Western ambassadors.
Though lower rates can support some businesses and consumers, economists believe it also pushes the already high inflation up which can soon make the central bank change track. Actually, Turkey is alone in cutting interest rates. Other central banks all over the world are raising rates to decrease rising global price pressures.
USD/TRY has become overbought and reversed down. The pair may drop to Friday’s low of 9.59. If it manages to fall below this support level, the doors will be open to the psychological level of 9.50. The long term remains bullish. Thus, after a short pullback, it should stick to its uptrend and reach 10.00 as many analysts forecast now.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
As you must already know, the direction of Gold is mainly dependent on the Price action of DXY (US Dollar index). So first, we take a look at the US Dollar index.
On January 12, the Bureau of Statistics will publish the Consumer Price Index (CPI) figures, a key index for determining interest rates. While we await the release, experts forecast a decline in the CPI data, a hint at weaker Dollar values in the global markets.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
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