FXStreet (Edinburgh) – In the view of strategists at TD Securities, the Turkish lira will remain under pressure as elections in Turkey get closer.
Key Quotes
“In the run-up to Turkey’s general election on 7 June, this week and next should see a rise in vol. Our view has not changed—our base case scenario, which is also the best possible in our opinion, is the one that preserves the status quo. But make no mistake, this is a bet between bad and worse”.
“The lira enjoyed surprising strength since the beginning of May. We have moved from TRY undervaluation vs our quarterly USDTRY forecasts of 2.65 for Q2, to overvaluation with the pair falling to 2.56 last week”.
“It’s not easy to position for these alternatives, but it looks like USDTRY could move higher from here until the vote. However, shorting TRY is expensive and exposes to the risk of sudden corrections in a higher vol environment”.
(Market News Provided by FXstreet)