USD/TL Started The New Week With Increase

USD/TL started the new week with an increase. FED's hawk stance was effective in shaping prices.

At the beginning of the first trading day of the new week, US dollar appreciated, and it was observed that the currencies of developing countries also lost value against the US dollar. Turkish Lira also opened the new week with depreciation. USD/TL exchange rate tested above 8.78 in the first transactions. Turkey's risk premium was traded at 389 basis points, while the benchmark bond yield was above 19 percent.

FED Points to 2023

It was stated that the pricing of the FED's switch changes in the global markets was the main reason for the effect reflected on the Turkish Lira. At the June meeting, FED officials signaled at least two rate hikes by the end of 2023. Finally, St. Louis FED Chairman James Bullard's statements also supported the pricing of the FED's hawkish attitude. Bullard, stating that they expect a good year with the opening of the US economy and that inflation increased faster than expectations, said, "It is natural for the FED to take a more hawkish stance." Speaking to CNBC, Bullard said, "The committee was surprised by the rise (inflation) in the last six months. If you look at the December 2020 summary of economic expectations (SEP), we were predicting 4 percent real GDP growth in 2021. Now we say 7 percent." Pointing to the reduction of asset purchases, Bullard said: "The President officially started the discussion at the meeting we left behind."