TRY appears supported near term – TDS

The Turkish Lira stays supported in the short term, although further weakness is not ruled out in the longer run, suggested Strategists at TD Securities.

Key Quotes

“Turkish inflation not yet under control, while growth remains subdued. Politics and security situation are major concerns. South Africa’s economy is weak, but very slowly improving; political and rating downgrades are major risks however. Reasonable growth in both Poland and Hungary with inflation nearing targets by end-2017. Russian economy is slowly recovering and inflation has almost fallen to the 4% target”.

“TRY to be supported near-term by recent tightening, but rising inflation, political risks and possible CBRT easing might cause weakness to resume in H2. ZAR exposed in the very near-term due to politics, but should improve as Zuma succession advances. Against EUR, negative on PLN, neutral on HUF. USDRUB looks too low given current level of oil prices, so we have recommended closing ruble longs, in spite of our bullish view on oil”.