Turkish Lira sustains its gains against dollar

The dollar-Turkish lira exchange rate, which sustained its downward trend following the Central Bank of the Republic of Turkey's (CBRT) decision on interest rates on Thursday, dropped to 3.6.

The Turkish lira increased by 3.21 percent against the dollar this week. Even though the lira is the most appreciated currency among the developing markets on Friday, it still continues to be the most depreciated currency since the beginning of the year with 2.43 percent.

The dollar-Turkish lira exchange rate, which maintained its decline Friday after the CBRT increased the Late Liquidity Window (LLW) from 11 percent to 11.75 percent despite making no changes in its policy interest rate and interest rate corridor, completed the day at 3.6224 with a 1.42 percent decrease.

Sustaining its decline again on Friday, the dollar was traded at 3.600 as the lowest level and stabilized at 3.6070 as of 09.45 with a decrease of 0.5 percent compared to the previous close. In the meantime, the euro-Turkish lira exchange rate was quoted at 3.8905 with a decrease of 0.4 percent while the pound-Turkish lira is trading at 4.4640 with a decrease of 0.4 percent.

The Bank of England (BoE) did not make any changes in interest rates and asset purchases schedule in line with expectations. The euro-dollar exchange rate was at its highest level since Feb. 6, at 1.0776, while the pound maintained its gain after the BoE's interest rate decision.

Analysts said that markets are currently focused on the two-day meeting of the G20 Finance Ministers and Central Bank Presidents in Germany, which commenced on Friday, and the statements regarding Brexit in the U.K. Noting that the data flow in the domestic market is calm and that the data on foreign trade in the euro area, industrial production and capacity utilization data in the U.S. will be followed, analysts suggested that 3.6520 is the resistance level in the dollar-Turkish lira exchange rate, while 3.5950 and 3.5500 are support levels.

Meanwhile, the dollar hit five-week lows against its peers on Friday, in the wake of the Federal Reserve's cautious message this week on the outlook for interest rate hikes and on concerns over a protectionist slant to a G20 meeting this weekend. Although the U.S. central bank delivered an interest rate increase on Wednesday as anticipated, it did not alter its earlier forecast for a total of three rate increases this year. That disappointed dollar bulls who had hoped for hints of a possible fourth hike in 2017 and for more aggressive forecasts for next year, and sparked the dollar's weakest three days since last August. The dollar index, which gauges the greenback against a basket of six major rivals, fell 0.2 percent to 100.29 after touching 100.16, its lowest level since Feb. 9. It was down more than 1 percent overall for the week and as much as 1.5 percent since the Fed hiked rates on Wednesday.