Turkish lira at a record low ❗

📉 TRY under pressure ahead of Thursday's CBRT decision

• Turkish lira hits record low amid concerns of lower interest rate hike
• Turkey's budget deficit widens significantly to $8.37 billion in June

The Turkish lira suffered a decline of over 2.4% against the US dollar, hitting a new record low. Concerns emerged in the market regarding speculation that the central bank might implement a lower-than-expected increase in interest rates. The lira reached an unprecedented low of 26.93 against the US dollar, signifying a depreciation of 30% since the beginning of the year.

Moreover, state banks reportedly pulled back their support prior to Thursday's interest rate decision meeting. Additionally, Turkey's budget deficit significantly widened in June to 219.6 billion lira ($8.37 billion), exhibiting a seven-fold increase compared to the same period last year. The primary deficit, excluding interest payments, also expanded from 18.29 billion lira to 182.3 billion lira year-on-year. In the first half of this year, the deficit accumulated to 483.2 billion lira.

During yesterday's session, USDTRY quotations broke out upwards from consolidation, forming a hammer candlestick formation on the D1 timeframe. If we look at history, we can observe a certain analogy in June. The quotations similarly held in a narrow consolidation, followed by a strong upward breakout. If history were to repeat itself, it is not excluded that the range marked in yellow could be filled, Source: xStation5