USD/TRY retreats towards 18.20 despite the most bullish options market bias since July

USD/TRY prints mild losses around 18.26 heading into Friday’s European session, consolidating recent gains around the yearly high, amid a broad pullback in the US dollar.

In doing so, the Turkish lira (TRY) pair ignores the strongest bullish bias in the options market in two months.

That said, one-month risk reversal (RR) on USD/TRY, a measure of the spread between call and put prices, snapped a two-day downtrend while rising to 1.395 by the end of Thursday’s North American trading session, per the data source Reuters. With this, the weekly RR is on the way to posting the biggest jump since mid-July.

It should be noted that the USD/TRY pullback appears tepid amid the monetary policy divergence between the US Federal Reserve (Fed) and the Central Bank of the Republic of Türkiye (CBRT).