The USD/TRY currency pair has been drawing increased investors' attention. And there is no wonder why.
- US dollar against Turkish lira continues a strong bullish momentum
- Turkey's military action in Syria makes lira lose its ground and depreciate further under pressure of subsequent US sanctions.
The Turkish lira has experienced turbulence in recent times. The TRY continues to fall against the USD amid growing concerns about the health of the Turkish economy. The country could be dragged into a recession, with Turkish industrial activity down 3.6% (year to August) and decreasing for the 12th month in a row.
Moreover, in response to Turkey's military invasion in northern Syria, the US President Donald Trump threatened to impose significant sanctions on Turkey. The European Union vowed to limit arms exports to the embattled country.
On Monday, October 14th 2019, the Turkish lira lost more than %0.8 to $5.931. To give historical context, the Turkish lira climbed to its all-time high of $7.21 in August 2018 with its record low occuring in June 1992 at $0.01.
Trade US Dollar / Turkish Lira CFD
This recent dollar vs lira price chart shows a steadily accelerating upwards shift amid the aggravating geopolitical tensions, caused by the Turkish “Peace Spring” operation. Consequently the Turkish lira remains suppressed from both domestic and global geopolitical economic fronts.
Turkey’s economic outlook is not uniformly disastrous however, the Organisation for Economic Co-operation and Development (OECD) has recently revised their forecast for Turkish growth to -0.3% for the end of 2019, instead of the -2.9% contraction it earlier foresaw. It maintained its 2020 projection that Turkey’s economy will grow by 1.6%, which is far less than President Erdogan’s target 5% GDP growth.
Retail sales are expected to increase by 0.3% in September, which is slightly less than in August. This data could be important for estimating the impact of the economic slowdown on consumers. If the sales are lower than expected, it will indicate that consumer space is affected more seriously, which may result in a bearish US dollar outlook.
At the same time, the US-China trade talks and the negotiated deal has a potential to support the US dollar. The proposed deal suggests delaying tariff implementation from the US side and purchasing US agricultural products from the Chinese side.
USD to TRY forecast
According to the latest technical outlook, the short-term USD/TRY forecast looks bullish. At the moment of writing the USD against the Turkish lira is rising and a surpass of 5.9416 would drive the price to test another resistance of 6.0027 (an August monthly high). On the flipside, the next support is waiting at 5.7536 followed by 5.6941, which is a 55-day moving average.
According to the Walletinvestor.com, the US dollar to Turkish lira forecast is considered a good long-term investment. The forex rate prognosis for October 2024 is 11.591. Therefore, if you decide to invest today, you may expect to get the revenue of +95.3%.
The long-term USD to lira forecast for the end of 2019 and 2020 also looks positive:
According to analysts from Gov Capital, USD against turkish Lira may fit your investment portfolio as a bullish market in 1 year perspective. The USD/TRY future currency rate is predicted at 9.826 (+27%) by October 2020.
Here is the USD/TRY rate forecast for the next couple of years:
What you need to know about USD/TRY investing
Although, the USD/TRY currency pair is not one of the go-to options, its historic high volatility, recently exacerbated by escalating geopolitical developments, could easily make it a pair of choice for numerous Forex investors.
To better understand what affects the USD/TRY rate and make thorough trading decision, you should consider some key drivers that can boost extreme US dollar to Turkish lira moves:
The USD/TRY rate highly depends on the interest rate decisions, made by the US Federal Reserve on the one hand and the Central Bank of the Republic of Turkey on the other hand
Other important factors, which have a significant impact on the USD/TRY price rate include US-Turkey trade relations and the risk of big tariffs amid the war operations in Syria, US-China trade tensions and global economic slowdown.
If you choose to trade CFDs on the USD/TRY coupling, you may find yourself in a win-win situation no matter whether you believe the price would continue the uptrend or make a U-turn. Either the USD to TRY forecast is positive or negative, you can always try to profit from the future price fluctuations, regardless of their direction.
Please note that in case of leveraged products like CFDs, gains, as well as losses can be magnified. Learn more about CFD trading with free online courses and stay tuned with the dollar to lira live rates with Capital.com.