The USD/TRY price rose moderately after the latest Turkish retail sales numbers. The pair rose to a high of 13.60, which is slightly above Wednesday’s low of 13.00.
Turkey retail sales data
The Turkish retail sector saw robust growth in November even as the Turkish lira continued its downward trend. According to the country’s statistics agency, retail sales rose from 1.1% in October to 1.3% in November. This increase led to a year-on-year gain of 16.3%, which was a better performance than the previous 15.5%.
Other areas of the Turkish economy did good as well. Industrial production rose from 8.7% in October to about 11.4% in November.
These numbers show that the country’s economy did well even as inflation jumped to a multi-year high. Data published this month revealed that the headline consumer price index (CPI) rose to over 30% in December. Still, analysts believe that the country’s inflation is significantly higher than where the official numbers are.
The Turkish retail sales numbers came at a time when many people in Turkey are worried about the country’s depreciating currency. The Lira has crashed close to its record low recently after a series of rate cuts by the Central Bank of the Republic of Turkey (CBRT). The headline interest rate is currently at 14%, which is lower than last year’s high of 20%.
The CBRT has argued that low-interest rates are needed to boost economic growth. Experts, on the other hand, have argued that low rates will stimulate inflation. In a bid to calm the market, the government announced a plan in which it will compensate holders of the Turkish lira for the losses they go through.
The USD/TRY is also reacting to the overall dollar weakness after the latest American consumer inflation data. The numbers showed that the country’s headline inflation jumped to the highest level in over 40 years.
USD/TRY technical analysis
The hourly chart shows that the USD/TRY pair found a strong resistance at the 1.1390 level. It struggled to move below this level several times this month. The pair is hovering near the 25-period moving average while the Average True Range (ATR) has declined.
Therefore, after the strong Turkish retail sales numbers, there is a likelihood that the Turkish lira will maintain its strength in the near term.
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