EURTRY CLIMBS FOLLOWING TURKEY'S MILITARY OPS IN SYRIA
The EURTRY parity, which has raised its earnings considerably higher in the new week, is now in rallies for the 6.43 level. Turkey launched a planned military operation into northeastern Syria on Wednesday, President Recep Tayyip Erdogan wrote on Twitter. The news triggered the depreciation of the Lira assets. Earlier, US President Trump said his administration would not support the operation. Trump also threatened to destroy Turkey's economy if Turkey goes "off limits" after his surprise decision to pull US forces out of north-eastern Syria. "As I have stated strongly before, and just to reiterate, if Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the Economy of Turkey (I’ve done before!),” he said in a series of tweets. However, later he said he would meet Erdogan in Washington in November, calling Turkey an ally.
Also, today, Turkish Central Bank Governor Murat Uysal made a presentation in the Parliamentary Planning and Budget Commission and stated that inflation was realized at the targeted levels with the recovery in the economy. Uysal explained that the policy rate cut was based on the outlook in inflation and drew attention to the limited deterioration in the banking sector. In addition, the pair seems to consolidate its mobility on the 6.40 level after the description of the improvement occurring in Turkey risk premium. Also the World Bank, upgraded the forecast for Turkey's 2019 economic growth from minus 1 percent to 0 percent level.
If we look at the Euro Zone, Euro assets continue to be under pressure as the announced macroeconomic data do not display a moderate outlook. In addition, the growing recession expectations for Germany continue to create fragility in the Eurozone economy as growth expectations for the German economy are reduced. Following all these developments, we can see that purchases gained momentum with the resistance of 6.43 in the parity which accelerated the rise of TL assets in the currencies of developing countries with negative decomposition. It is likely that the pair will accelerate the buying-side movements especially after the operations against Syria. As the main resistance point of the pair, we follow the 6.50 level.