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Short USDTRY on continued US govt shutdown

FX:USDTRY   U.S. Dollar / Turkish Lira
Sell USDTRY on continued US govt shutdown and poor global growth data lowering the chance of US central bank raising interest rates further. Rates markets including cash and derivatives are pricing in at most 21% chance of a rate hike from summer 2019 onwards. Why does this matter? Emerging markets fund their budgets in USD and as US rates increase EM funding costs increase putting downward pressure on the economy. As the US shut down continues the chances of a US recession increase lowering any probability of a rate rise.

On technical front downside momentum has been continuing since middle of January with a series of lower highs and lower lows and we now look set to test month lows.

A close on the daily below 5.279 low of January 2nd opens up downside to test 5.20 area then a move to 5.15 November lows which we are looking to hit over next month should sentiment and growth data continue on current trajectory.

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