New forecast for the dollar exceeding the critical threshold!

Milliyet.com.tr/ÖZEL With the Central Bank 's interest rate cut, deposit yields have fallen, while investors' attention has turned to the stock market, gold, and foreign exchange rates. Driven by the positive atmosphere surrounding the interest rate cuts, the stock market broke a record high this week, approaching 10,400 points, while gold prices have also fluctuated.

USD/TL EXCEEDED CRITICAL THRESHOLD

Meanwhile, the dollar exchange rate surpassed the 41.00 TL threshold on Friday. The euro, which had been declining throughout the week, recovered on Friday and is now hovering around 48.00 TL. The dollar's year-to-date return has been limited to 16%. The euro/TL exchange rate, on the other hand, has gained over 30% since the beginning of the year. During the same period, gram gold has returned 49%. Borsa Istanbul, which had gained 6.83% in the last month, has seen year-to-date returns of only 15.36%.

So, what are the predictions for the dollar/TL exchange rate exceeding 41.00 TL? What's the reason for the dollar's rise? BLGFinancial Consulting Founding Partner Belgin Maviş , speaking to milliyet.com.tr about the markets, said: “We're seeing the dollar surpass 41.00 TL. This was already a necessary point. It's perfectly normal for the dollar to perform this way in a period where money released from deposits is supported, as well as foreigners entering the stock market.”

'The movement in the dollar will remain limited'

This rise can be interpreted as a bit of a balancing act, a shift in some of the significant money released from deposits to a foreign exchange position. At a point where the dollar index is below 100, movement in the dollar will be limited.

Since the beginning of the year, we see that the stock market, in particular, has increased by nearly 16%. This is below its peak in dollar terms. Let's also remind you that gold, more than foreign currency, generates more profit for investors.

The main reasons for the low dollar returns are the dollar index falling below 100, the euro/dollar parity rising to 1.17, and the Fed's failure to cut interest rates as quickly as desired following Trump's tariff implementation.

WILL THE RISE IN THE EXCHANGE RATE CONTINUE?

I don't think the exchange rate will continue to rise. If the dollar index moves above 98 and towards 100, we will see a change in the dollar's domestic course. The gap between the euro/dollar pair and the dollar index has widened significantly. We've entered a period of stronger euros. Based on Fed Chair Powell's statements on Friday, there's a strong possibility of a rate cut in September. I believe the dollar's price action will be more limited, while the price action for gold ounces and grams of gold will continue upward.

Markets are expecting a 25 basis point rate cut from the Fed in September. However, after Powell's statements today, I believe a rate cut of more than 25 basis points will be implemented to support the real sector.

I believe the Central Bank of the Republic of Turkey will also consider a rate cut at its September interest rate meeting. The September-October interest rate could be cut to as low as 37-38%. I believe a wait-and-see approach may be in place for December.