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August 25th - According to Iranian sources on the 25th local time, a source close to the Iranian negotiating team stated that Iran hopes to clearly convey its position and negotiating conditions regarding the Strait of Hormuz to the United States through Pakistan. The source said that during a meeting with visiting Pakistani Army Chief of Staff Mohammad Munir on the 24th, Iran clearly explained its position to Pakistan. Irans conditions include the United States complying with the Islamabad Memorandum of Understanding and fulfilling its relevant provisions, with Article 5 concerning Irans arrangements for the management of the Strait of Hormuz. The source indicated that Pakistan is seeking to convey these conditions to the United States.On August 25th, Federal Reserve Chair Janet Collins stated that she currently supports maintaining interest rates, but this stance depends on seeing further progress in inflation declining and gradually moving towards the Feds 2% target. Collins wrote, "To maintain the current target range for the interest rate, we need to continue to see evidence that inflation is indeed declining. If this evidence of a sustained decline in inflation does not emerge, I think monetary policy should be tightened as soon as possible." She stated that recent inflation data showed underlying price pressures were moderate, which was "somewhat encouraging," but added that monthly data could be volatile. "Whether the recent improvements can be sustained remains to be seen." Collins said that tighter interest rates, coupled with rising long-term yields, should alleviate some of the inflationary pressures from strong household and business consumption. She added that the impact of previous tariffs is expected to have largely subsided, and the impact of rising oil prices on inflation should also begin to weaken.Canadian Finance Minister: U.S. tariffs will have a real impact on Canada, and we must respond.On August 25th, Canadian Prime Minister Mark Carney announced retaliatory measures against the new tariffs imposed by US President Donald Trump over the weekend, along with a support plan to help Canadian businesses impacted by the escalating trade war. Canada will double its existing retaliatory tariffs on US steel and aluminum products to 50%. The 50% tariff will also apply to US-made furniture, clothing and apparel, video game consoles, smartphones, and other electronic products. Overall, these retaliatory tariffs will affect approximately $20 billion worth of US imports, roughly equivalent to the tariffs Trump imposed on Canadian products on Saturday under a previously unused provision of the Tariff Act of 1930. This represents about 6% of Canadas total imports from the US last year.August 25th - According to data from online platforms, the total box office revenue for 2026 (including pre-sales) has exceeded 27.5 billion yuan. The total box office revenue for the 2026 summer movie season (including pre-sales) has exceeded 11.7 billion yuan, with 46 consecutive days of daily box office revenue exceeding 100 million yuan. Both the number of moviegoers and screenings have broken historical records.

USD/TRY reestablishes its annual high on route to 17.00, notwithstanding Erdogan's expectation of future inflation moderation

Alina Haynes

Jun 06, 2022 15:25

 截屏2022-06-06 下午3.23.52.png

 

In spite of Turkish currency (TRY) traders' inflation worries and President Erdogan's efforts to appease TRY purchasers, the USD/TRY continues to trade near $16.36, the highest level since 2022. The pair's upward momentum is influenced by Friday's high Turkish inflation data for May, as well as the US dollar's comeback over the last week, not to mention expectations of the Fed's faster/more aggressive rate rises.

 

According to Reuters, "Turkish President Tayyip Erdogan stated on Sunday that inflation numbers from the month of May, when annual consumer prices soared to a 24-year high, indicate that inflation is now on the down." It is noteworthy that the May inflation rate for Turkey increased to 73.5 percent in the most recent report.

 

Reuters also reported that the lira fell by 44 percent last year and has been the poorest performer in emerging markets for several consecutive years, mostly owing to economic and monetary policy worries under the administration of President Tayyip Erdogan.

 

In contrast, the odds supporting a 0.50 percent rate hike by the Federal Reserve in September have lately increased to 75 percent from 35 percent a week earlier, which emphasizes this week's US Consumer Price Index (CPI) data and favors US dollar purchasers. In spite of this, the US Dollar Index (DXY) reversed a two-week downward trend at Friday's close, trading down 0.14 percent intraday near 102.000 as of press time.

 

US Nonfarm Payrolls (NFP) for May came in at 390K, above expectations of 325K but falling short of the upwardly revised prior readings of 428K. In addition, the unemployment rate stayed constant at 3.6% against predictions of a minor reduction to 3.5%. In addition, the US ISM Services PMI dropped to 55.9 in May, compared to the market estimate of 56.4 and the flash reading of 57.1 in April. Following the release of the statistics, Loretta Mester, president of the Federal Reserve Bank of Cleveland, stated that the Fed's only worry is inflation. The officials underlined that the likelihood of a recession has increased.

 

Wall Street benchmarks finished in the negative and US 10-year Treasury rates saw their first weekly increase in three weeks to reflect the risk-averse sentiment of the previous day. However, S&P 500 Futures increased by 0.5 percent to 4,126 and US 10-year Treasury rates fell by 1.3 basis points (bps) to 2.942 percent as per the most recent data available.

 

Amid a pre-Fed blackout for Fed officials and in anticipation of Friday's US CPI, USD/TRY traders should pay attention to risk drivers moving forward.

Technical Evaluation

A successful breach of the prior resistance line from early January, about 16.45 at the time of publication, would lead USD/TRY values toward the $17.00 mark before testing the late 2021 top at $18.36.


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