USD/TRY braces for $14.00 with eyes on Turkey Unemployment Rate, US inflation

• USD/TRY treads water after two-day rebound from weekly low.
• Turkish FinMin promises fiscal discipline, sees lower budget deficit.
• Moody’s expects more inflation, another CBRT rate cut in December.
• Markets brace for US CPI amid mixed sentiment, Turkish Unemployment Rate will be important as well.

USD/TRY seesaws between $13.75-80 during an inactive Asian session on Friday.

In doing so, the Turkish lira (TRY) pair buyers take a breather following a two-day recovery from the weekly low as markets show a lack of confidence in buying the TRY despite hawkish comments from the Turkish policymakers of late.

On Thursday, Turkey’s new Finance Minister (FinMin) Nureddin Nebati tried following the previous day’s comments from President Tayyip Erdogan, to placate the pessimism surrounding the lira. The policymaker said, per Reuters, that the budget deficit would come in under 3.5% of GDP this year and would be managed with fiscal discipline.

Before him, global rating giant Moody’s said, “Turkey could see consumer price inflation surpass 25% in coming months with another potential interest rate cut in December adding to upside risks for its forecasts,” as per Reuters.

It’s worth noting that the anxiety over the US Federal Reserve’s (Fed) next policy step keeps the USD/TRY recently tight-lipped. Also adding to the trading filters is the mildly bid US Treasury yields and stock futures despite growing chatters over Fed rate hikes and Omicron.

That said, the pair traders will initially react to Turkey’s November Unemployment Rate, prior 11.5%, before waiting for the US Consumer Price Index (CPI) data. Should the scheduled US inflation figures arrive strong, the odds of Fed’s action could propel the USD/TRY towards refreshing the all-time high.

Read: US Consumer Price Index November Preview: Inflation is the new cause celebre

Technical analysis

Although the monthly resistance line, around $13.85, becomes the key hurdle for USD/TRY buyers, the pair bears are less likely to enter until the quote stays beyond the 12-day-old support line near $13.60.