The current exchange rate for USD to TRY is at 39.39, reflecting a 2.2% increase above its three-month average of 38.53. The exchange rate has shown relative stability, oscillating within a 7.4% range between 36.69 and 39.42 in recent months.
Analysts note that the U.S. dollar (USD) has faced downward pressure due to a return of risk appetite among investors, leading to a sell-off of the safe-haven currency. Contributing to this trend was the latest U.S. economic data, which revealed a significant drop in the New York state manufacturing index, marking the lowest level since March. Market sentiment may shift further following the upcoming U.S. retail sales figures, with expectations of a 0.7% decrease in sales growth, signaling potential weaknesses in the economy that could dampen demand for the USD.
The Federal Reserve's monetary policy remains a critical factor influencing the USD's strength. Higher interest rates typically attract investment, bolstering the dollar, while a more dovish stance can undermine its value. Economic indicators such as inflation, employment, and GDP growth all play key roles in shaping the dollar's trajectory.
In contrast, the Turkish lira (TRY) is under significant pressure due to a combination of internal and external factors. The recent arrest of Istanbul's mayor, Ekrem İmamoğlu, has sparked widespread political unrest and raised doubts about President Erdoğan's commitment to economic reform and stability. These events have negatively impacted investor confidence, resulting in the lira hitting new record lows against the dollar, with a notable 3.3% decline linked to these political tensions.
Furthermore, a 10% reciprocal tariff imposed by the U.S. on Turkish goods as part of broader trade tensions exacerbates the situation for the TRY. These tariffs can strain Turkey's export capabilities and undermine economic growth, heightening the lira’s vulnerability in currency markets.
Looking ahead, currency forecasters suggest that the USD/TRY exchange rate could remain influenced by continued volatility in Turkish politics and the evolving economic landscape in the U.S. As geopolitical tensions and economic data continue to unfold, investors mayneed to keep a close watch on these developments to navigate the impacts on currency transactions effectively.