Turkish lira may hit new all-time lows near 9 per dollar – Commerzbank

Turkey’s lira, which weakened to a record low of 8.61 per dollar on Friday, may face further losses, said Karen Jones, the head of a technical research team for currencies at Germany’s Commerzbank.

The lira could drop towards a key psychological level at 9 per dollar, Jones said, according to news and analysis website FX Street.

The lira strengthened on Monday, trading up 0.4 percent at 8.51 per dollar in mid-afternoon local time, after the government reported the economy growing by an annual 7 percent in the first quarter of the year, beating economists’ expectations. The rally was matched by general gains for emerging market currencies.

The decline in the lira is expected to continue, so long as it does not strengthen beyond the 8.2965 per dollar it reached in mid-May, Jones said. There is technical resistance to losses at 8.7218 per dollar and 8.82 per dollar. An intraday level of 9.1 per dollar is possible, she said.

The lira has lost more than 15 percent of its value since mid-March, when President Recep Tayyip Erdoğan sacked the governor of the central bank and hired a dovish replacement. Investors are selling the currency due to concerns about monetary policy and annual inflation of 17.1 percent.

Jones said there is minor support for the dollar-lira trade at 8.4869 and 8.4605 per dollar. The lira traded as strong as 8.4672 per dollar earlier on Monday.