PRICES SQUEEZE IN USDTRY IN NEW WEEK
The increase in the number of coronavirus cases strengthens the belief that second wave concerns on the rise while the indices continue to maintain their weak appearance. Increasing the number of cases in China is supported by the increased number of cases in the southern and western states of the USA with the opening of businesses. Thus, both economies limited their normalization steps and increased their restrictions again in the business and restaurant chains. Some recovery in the economies and the course of the macroeconomic data announced have given the markets a little relief, but the dollar index appears to be trying to maintain its lucrative outlook with the increasing liquidity requirement. Thus, it is seen that the rises in USDTRY, which are located above the 6.85 level, are in a limited trend.
If we look at the domestic developments, President Recep Tayyip Erdoğan stated that they expect to reach strong growth rates in the last two quarters of the year. According to the Presidental decree published in the Official Gazette, it has been announced that the imposition of import restrictive customs duties will be implemented to increase domestic production.
Up to 20 percent additional customs duty is expected for more than 400 items in imports by the end of September. On the other hand, Culture and Tourism Minister Mehmet Ersoy and Foreign Minister Mevlut Cavusoglu are reportedly leaving for Germany on July 2 to discuss tourism relations between the two countries.
In the U.S., while the risk of coronavirus triggers the demand for the dollar, the U.S. Department of State has indicated that it has brought visa restrictions to Chinese Communist Party officials due to steps that violate Hong Kong's autonomy and human rights.
After all these developments, USDTRY, which has a limited momentum in its pricing above 6.85 level, can be expected to gain momentum by rising above the 6.90 and psychological 7.00 resistance. It is observed that the stance in the Turkish Lira, which has limited its losses after the CBRT meeting last week despite the earnings on the dollar side, caused some tightening of prices on the USDTRY side. While 6,8320 is the first support point in a possible withdrawal potential of the exchange rate, we follow the critical 6.75 threshold below this level.