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USD/TRY headed to all time high 3.0750? – BBH

By FXStreet Analysts at Brown Brothers Harriman noted that the lira has performed along with the rest of EM this year.

Key Quotes:

“Compare this to 2015, when TRY underperformed and lost -20% vs. USD. The only worse performers last year were ARS (-35%), BRL (-33%), ZAR (-25%), COP (-25%), and RUB (-20%). So far this year, TRY is down -1% YTD, and is in the middle of the pack. The worst performers are ARS (-17% YTD), MXN (-5.5% YTD), and KRW (-5% YTD). We expect TRY underperformance to return, as our EM FX model shows the lira to have VERY WEAK fundamentals.

For USD/TRY, the 2.90 area has proven to provide good support since early December. The 20-day MA comes in near 2.87. We believe that negative EM sentiment will return to the markets in the coming weeks. When it does, TRY should be one of the underperformers and so we expect an eventual test of the all-time high near 3.0750 from September. The 2016 high was near 3.06.

Turkish equities have outperformed within EM. Last year, MSCI Turkey was down -12.3% and compares to -16.6% for MSCI EM. …read more

Source:: FX Street

      

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