USD/TRY drops to three-day lows near 5.68 ahead of FOMC

• USD/TRY moves lower to the 5.68 area, 3-day lows.
• Higher oil prices keep TRY bid today.
• US FOMC meeting coming up next in the calendar.

The Turkish Lira is extending the upbeat momentum so far this week and is now dragging USD/TRY to the area of multi-day lows in the 5.6800 region.

USD/TRY focused on data, FOMC

TRY has started the week on a positive footing and is dragging the pair to fresh weekly lows near the 5.68 handle on the back of higher crude oil prices, increasing effervescence in the Middle East and prospects of Fed easing later today.

In fact, TRY is deriving extra buying pressure despite the recent developments in crude oil, in particular after the drone attacks to Saudi oil facilities last Saturday. Investors continue to view the upcoming rate cut by the Fed as an opportunity to increase the positions in high-yield currencies, thus lending extra support to the EM FX space.

In the domestic docket, the CBRT will publish its monetary policy minutes from the last meeting on Thursday ahead of the Central Government Debt Stock on Friday. On Monday, Turkish Retail Sales contracted 1.5% on a monthly basis during July and 3.7% from a year earlier. In addition, the Unemployment rate rose to 13.0% on a year to June, while the Employment rate ticked a tad lower to 46.4% during the same period.

USD/TRY key levels

At the moment the pair is losing 0.21% at 5.6826 and faces the next support at 5.6695 (55-day SMA) seconded by 5.6483 (monthly low Sep.12) and then 5.6109 (200-day SMA). On the upside, a surpass of 5.7453 (21-day SMA) would aim for 5.7760 (100-day SMA) and finally 5.7913 (high Sep.11).